Hybridizations, Contaminations, Triangulations:
Itineraries in Comparative Law Through the Legal Systems of
Italy and Japan

edited by Giorgio F. Colombo

THE ITALIAN LAW JOURNAL
An International Forum for the Critique of Italian Law
Special Issue

Hybridizations, Contaminations,
Triangulations: Itineraries in Comparative Law
Through the Legal Systems of Italy and Japan
edited by Giorgio F. Colombo

www.theitalianlawjournal.it

Editors-in-Chief
Camilla Crea (Università degli Studi del Sannio)
Andrea Federico (Università degli Studi di Salerno)
Pasquale Femia (Università degli Studi della Campania ‘Luigi Vanvitelli’)
Giovanni Perlingieri (Università degli Studi della Campania ‘Luigi Vanvitelli’)
Advisory Board
Guido Alpa (Università degli Studi di Roma La Sapienza)
Lyrissa Barnett Lidsky (University of Missouri)
Maria Celina Bodin de Moraes (Universidade do Estado do Rio de Janeiro)
David Cabrelli (University of Edinburgh)
Guido Calabresi (Yale University)
Mario De Caro (Università degli Studi di Roma 3)
Carlos Fernández Sessarego (Pontificia Universidad Católica del Perú)
Andreas Fischer-Lescano (Universität Bremen)Martin Gebauer (Universität Tübingen)
Cecilia Gomez-Salvago Sanchez (Universidad de Sevilla)
Xue Jun (Peking University)
Peter Jung (Universität Basel)Peter Kindler (Ludwig-Maximilans-Universität München)
Michael Lehmann (LM Universität München; MPI, München)
Heinz-Peter Mansel (Universität Köln)
Paul Matthews (King’s College London)
Jason Mazzone (University of Illinois Urbana-Champaign)Peter-Christian Müller-Graff (Ruprecht-Karls-Universität Heidelberg)
Renato Nazzini (King’s College London)
Pietro Perlingieri (Università degli Studi del Sannio)
Otto Pfersmann (Ecole des Hautes Etudes en Sciences Sociales, CENJ, Paris)
Ursula Stein (Technische Universität Dresden)
Matthias E. Storme (University of Leuven)
Gunther Teubner (Goethe Universität-Frankfurt am Main)
Amanda Tyler (University of California, Berkeley)
Mauricio Troncoso (Universidad Autónoma de Madrid)
Verica Trstenjak (Universität Wien; MPI Luxembourg)Louis Vogel (Université Paris 2 Panthéon-Assas)
Simon Whittaker (University of Oxford)
Dai Yokomizo (Nagoya University Graduate School of Law)
Lihong Zhang (East China University of Political Science and Law)
Linguistic Board
Girolamo Tessuto - Chief Editor (Università degli Studi di Napoli Federico II)
Vijay K. Bhatia - Senior Associate Editor (City University of Hong Kong)
Giuliana Elena Garzone - Senior Associate Editor (Università degli Studi di Milano)
Senior Associate Editors
Michael R. Dimino, Sr. (Widener University Commonwealth Law School)
Rafael Porrata Doria (Temple University, Beasley School of Law)
Associate Editors
Emilie K. Aguirre (University of California, Los Angeles)
Claudia Amodio (Università degli Studi di Ferrara)
Marco Bassini (Università commerciale Luigi Bocconi, Milano)
Monica Cappelletti (Dublin City University)
Salvatore Caserta (iCourts, University of Copenhagen)
Alberto De Franceschi (Università degli Studi di Ferrara)
Samuel Fulli-Lemaire (Université Paris II Panthéon-Assas)
Monica Iyer (Attorney, Milan)
Francesco Longobucco (Università degli Studi di Roma 3)
Adriano Martufi (Universiteit Leiden)
Robert McKay (Law Editor, Belfast, London and Rome)
Clare Frances Moran (Edinburgh Napier University)
Sarah Pasetto (Italian Constitutional Court)
Francesco Quarta (Università degli Studi di Bologna)
Filippo Valguarnera (University of Gothenburg)
Matteo Winkler (HEC Paris)
Kristen Zornada (LLM (Harvard), Lawyer

ISSN 2421-2156 November 2018

DOI 10.23815/2421-2156.ITALJTable of Contents

The Italian Law Journal
Special Issue
Hybridizations, Contaminations, Triangulations:
Itineraries in Comparative Law Through the Legal
Systems of Italy and Japan
edited by Giorgio F. Colombo

GIORGIO F. COLOMBO, Introduction….……………………………………………..

1

ANDREA ORTOLANI, Legal Systems and Legal Families: Italy and Japanin Comparative Perspective…………………………………………….………

7

ANTONELLO MIRANDA, The Bleeding of Legal Rules Between Rights
and Limits, in the Age of Migration Flows and the Crisis of the
Nations……………………………………………………………………………….

23

PIERLUIGI DIGENNARO, Anti-Discrimination Legislation and Work
Placement for Persons with Disabilities. A Comparison Between
Italy and Japan……………………………………………………………………

39

MICHELA RIMINUCCI, Indirect Discrimination in Japanese Law: A
European Perspective……………………………………..............................

55

POMPEO POLITO, The Protection of Our Image: Between the Right toOne’s Own Image and the Right of Publicity......................................

69

GIACOMO MANNOCCI, The Public Administration and the Citizens
Privacy Protection. A Comparison Between European Union
and Japan...…………………………………………………………………………

83

MATTEO DRAGONI, Software and Patent Law: Reverse Contaminations,Hybridizations and Trends, Observed Through the Legal Systemsof Italy (and the EPC System), Japan, and the United States..........

95

GIUSEPPE GENNARI AND TAKESHI MATSUDA, Scientific Evidence andCriminal Proceedings: The Italian and Japanese Experience ….……

115

MASAKI SAKURAMOTO, Current Situation of Consumer Bankruptcy inJapan………………………………….…………………………………….............

129

SEIYO KOJIMA, Contribution-Benefit Relationship in Social Security in Italy
and Japan………………………………………………………………………...……..

145

SEAN MCGINTY, Legal Families and the Birth, Growth and Death of a
Corporate Law Rule……….………..........................................................

159

FRANCO SERENA, Is the CISG a Useful Tool for the Interpretation of the
Newly Reformed Minpō?.......................................................................

177

The Italian Law Journal is sponsored by ‘Harvard Italian Law Association’(HILA), by ‘Società Italiana degli Studiosi del diritto civile’ (SISDIC) and by‘Società Italiana per la ricerca nel diritto comparato’ (SIRD).

Introduction
Giorgio F. Colombo

This special issue has its origin in the Third Annual Conference of theJapanese-Italian Association for the Study of Comparative Law (Nichi-I
Hikakuhō Kenkyūkai). The general topic of the Conference was ‘Hybridizations,Contaminations, Triangulations: Itineraries in Comparative Law through theLegal Systems of Italy and Japan’, and it was based on two preliminary
assumptions: a certain degree of ‘mixture’ in contemporary legal systems; andthe virtues of ‘triangular’ comparison. It also wanted to promote the use ofdifferent standpoints and methodologies (institutional comparison, culturalcomparison, law and economics, etc), and welcomed inputs from different
countries. Before describing the content of this issue it is therefore important toprovide readers with the theoretical framework behind it.
On the first point: after decades of struggle and debate, comparative law
scholars seem to have finally agreed on the fact that basically all contemporary
legal systems show elements of hybridization between civil law, common law
and other legal traditions. Moreover, the very idea of ‘mixture’ has been subject
to scrutiny and has arrived at a more critical, nuanced stance.1According to thisperspective, every legal system is, to some extent, ‘mixed’: how the blend iscomposed, however, is different. In this regard Italy and Japan are very goodcase studies: both countries solidly fit within the Continental legal tradition andthey both have a complex history of legal imports which is still going on todaywith reforms inspired by the American model. This trend extends across a
broad range of fields including corporate law, criminal procedure and even legal
education. While the existence of this tendency in itself seems to beunquestionable, its critical assessment and the evaluation of its impact may
differ among scholars viewing it from different countries.
On the second point: while any comparative law expert worth their salt isAssociate Professor of Comparative Private Law, Nagoya University Graduate School of Law.

1 E. Örücü, ‛What is a Mixed Legal System: Exclusion or Expansion?’ 12(1) Electronic Journalof Comparative Law, (May 2008), available at https://tinyurl.com/y9n2ampx (last visited 15
November 2018); S.P. Donlan, ‛The Mediterranean Hybridity Project: Crossing the Boundaries
of Law and Culture’ 4 Journal of Civil Law Studies, 335-396 (2011); M. Bussani, ‛A Pluralist
Approach to Mixed Jurisdictions’ 6 Journal of Comparative Law, 161-168 (2011); S.
Thomson, ‛Mixed Jurisdictions and the Scottish Legal Tradition: Reconsidering the Concept of
Mixture’ 7 Journal of Civil Law Studies, 51-91 (2014).

2018]

Introduction

2very well aware of the importance of having a tertium comparationis, the issue
is particularly interesting in the case of comparative studies on Italy and Japan.
For example: when scholars from Italy start their study of Japanese law, mostof them (there are a few notable exceptions, some of whose are represented inthis Special Issue) will not be able to access primary sources in Japanese. They
will need to rely on materials written in English, hence experiencing from thevery outset of their academic interest one of the other key issues in comparative
law: the problem of translation and accessibility of diversity.2 More so, the useof English to compare two civil law jurisdictions is particularly dangerous andineffective. The usage of common law lexicon forces the interpreter to work
their way through the perils of ‘lost in translation’ and to reflect on the origin,nature, and function of legal institutions belonging to different systems. If wecompare, like many of the authors represented here did, two civil law
jurisdiction using English, the language of common law, we need to triangulatetranslating not only words, but categories, from one system to the other, andback again. This triangular3 linguistic and comparative exercise is also very usefulto prevent the naïveté that seems to affect even some of the most experienced
scholars: it leads to careful reflections about balancing and giving proper weight
to institutional, functional, and cultural aspects. As has already been pointed
out, both the desire to look for similarities and the anxiety about assessing
differences may distort the comparative lens, leading analyses to overestimate
the importance of either formal or informal factors.4 In the cases of both Japanand Italy,5 that has often taken the form of an oversimplification of real or
allegedly ‘cultural’ aspects. However, if one looks carefully, many unfamiliarfeatures are considered as such just in the eye of the beholder.
In light of the above reflections, all authors provided their contribution tothis broader discussion, tackling either aspect, or both, from different angles.
This issue showcases several essays, from different areas of law, and involving
both micro and macro-comparison issues.
Andrea Ortolani deals with one of the true classics of macro-comparativelaw, ie the collocation of Italy and Japan in comparative law. After a deeply
reasoned analysis of the use of taxonomies in comparative law in the 21st
century, and a lucid recognition of their inevitable shortcomings, the paper
2 V. Grosswald Curran, ‛Comparative Law and Language’, in M. Reimann and R.
Zimmermann eds, The Oxford Handbook of Comparative Law (Oxford: Oxford University
Press, 2006), 675-708.
3 V. Taylor, ‛Spectres of Comparison: Japanese Law through Multiple Lenses’ 6 Zeitschrift
für Japanisches Recht, 11-16 (2001); L. Nottage, ‛Japanisches Recht, Japanese Law, andNihon-hô: Towards New Transnational Collaboration in Research and Teaching’ 6 Zeitschrift
für Japanisches Recht, 17-21 (2001).
4 T. Ruskola, ‛Legal Orientalism’ 101 Michigan Law Review, 179-234 (2002).
5 G.F. Colombo, ‛Nomophilacy and Beyond: Comparative Reflections on Judicial Precedents
by Supreme Jurisdictions in Italy and Japan’ 4 European Journal of Comparative Law andGovernance, 281-315 (November 2015).

3

The Italian Law Journal[Special Issue

reflects on the consequences of a specific framing. The contribution moves
elegantly between broad intellectual reflections and very practical conclusions,and provides very useful Cartesian ‘provisional morals’ to whoever would like toventure into the study of Japanese law. The substantial impossibility of being at
the same time accurate and comprehensive reminds of the witty satirical story
by Umberto Eco, titled ‘On the impossibility of drawing a map of the empire ona scale of 1 to 1’.6 Eco describes an Empire in which cartographers want tocreate a perfectly accurate map of the Empire on a scale 1 to 1, including its
people, animals, buildings, etc. They try to create a suspended map, but thatwould prevent rain from falling on the ground and would destroy agriculture;they try with a transparent map, etc, but nothing works. His conclusion is that atruly accurate 1 to 1 map is impossible. Probably we will have to accept the sameconclusion for comparative law.
Antonello Miranda’s rich analysis of multiculturalism and multicommunitarism
could not be more relevant in the present conjuncture. Globalization is a fact,
but, as already pointed out by Teubner, 7 is not a well ordered Kantian
phenomenon of homogenization, but rather some complex and messy movementwith which we, as society, need to somehow deal.
Italy and Japan share the controversial privilege of being among the countries
with the oldest populations. Yet, in Italy, this is tempered by immigration, while
in Japan the lack of young immigrants will result in a sharp decrease in the
population. With immigration comes the challenge of multiculturalism: theimmigration debate in Europe, which unfortunately has taken a very gloomyturn, leaves us with some fundamental questions about pluralism. What should
the legislator do in the face of cultural diversity? Should the State reclaim its
role as unifier or even educator, or should it embrace diversity? And if so, towhat extent? The ethical and legal dilemma is: should the State withdraw from
regulating cultural expression? For example, in the eyes of a Muslim man, theact of praying five times a day and the possibility of having multiple wives may
belong to the same area of exercise of a duty, in one case, and a right, in theother, in line with his religious belief. But for the State those are two radicallydifferent issues! The State may decide that one is good and the other is bad: but
this is of course a decision based on an external perspective.
Pierluigi Digennaro deals with the regulation of disabled persons’ rights
under labor law regulation. His essay dances between the recognition ofsimilarities and diversities between Japan and Italy. Those legal systems are tosome extent prima facie similar: an institutional comparison shows how
regulation in both countries now looks alike, also under the influence of
6 U. Eco, ‘Dell’impossibilità di costruire la carta dell’Impero 1 a 1’, in Id, Il secondo diario

minimo (Milano: Bompiani, 1992).
7 G. Teubner, Constitutional Fragments: Societal Constitutionalism and Globalization(Oxford: Oxford University Press, 2012).

2018]

Introduction

4

international standards. However, there are striking differences in both theimplementation and the effect the concerned legislation had in Japan and Italy.
This solicits, of course, reflections based on grounds other than a mere – or, if
one likes, dry – reference to the law in the books.
Michela Riminucci’s paper offers a European perspective on Japan,
addressing the issue of ‘indirect discrimination’ in Japanese law. Her analysis issolidly rooted in the legislation, but from this institutional standpoint she isnevertheless able to draw some conclusions about a broader political attitude
towards legislative process and the complex dialogue between rights, individual
laws, and public opinion.
Pompeo Polito deals with a painfully relevant topic in the contemporary
setting: in the world of technology, privacy itself has vanished, and a legal
framework thought up for a physical, national, world struggles to regulate
virtual, a-national phenomena. Through the analysis of the right to privacy in
the American legal system and the right to one’s own image in the Italian legal
system, he shows the clear analogies between these legal institutions despite thedifferences in their origins.
Giacomo Mannocci also deals with a topic which became extremely
relevant while this issue was being processed, ie the protection of citizens’
privacy and the corresponding duties upon the public administration in Japanand Europe, due to the recent developments in free trade between the European
Union and Japan. While the second prong of comparison is, formally, EU
legislation, the author does not forget to address the peculiarities of Italy in thisregard.
Matteo Dragoni pays homage to a truly triangular approach by analyzing
software patents (and/or their absence) in the legal systems of Italy, Japan, andthe United States. His analysis is enriched by some pragmatic remarks about
the breadth of similarities and difference in a realm – technology – where ideas
and products travel at dizzying speed, and how a legal artifact such as a patent
may be able to survive, notwithstanding a different approach in its creation andprotection.
Giuseppe Gennari and Takeshi Matsuda carry out a true international andinter-professional venture, by sharing elaborate views on the usage of scientificevidence in the criminal process in Italy and Japan, from a magistrate and ascholar’s point of view. Their work, also based on the description of some highly
debated and controversial cases in both jurisdictions, shows that notwithstandingan allure of infallibility, the usage of scientific evidence in courts needs to undergo
significant improvement. This bears in mind the somehow frightening – butnevertheless inevitable – idea that this kind of science is not infallible and this isirrespective of legal styles or cultures.
Masaki Sakuramoto presents the current situation of consumer bankruptcy
in Japan. Drawing a long arc, starting from the collapse of the Bubble Economy

5

The Italian Law Journal[Special Issue

in the early ’90s and finishing in the aftermath of the ‘Triple Disaster’ of March
2011, the papers assesses the changes in the legislation, and provides the reader
with extremely detailed statistics about the present landscape of consumer
bankruptcy. The author, moving from what may look like a purely numericalanalysis, is able to draw conclusions interweaving social perceptions and technical,
legislative aspects.
Seiyo Kojima offers a highly technical and remarkably accurate analysis ofsocial security in Italy and Japan, in light of the ideas of ‘automatic benefit’ and‘contribution-benefit relationship’, respectively. One of the key aspects of the paper
is how the author is able to offer – in the form of hypotheses – some insightful
remarks about the role of law in society by building on a rigorous institutional
comparison of contribution mechanisms in the concerned jurisdictions.
An issue aiming to be ‛triangular’ would have not been complete without
the contribution of a scholar from the common law world: this role is fulfilled by
Sean McGinty’s essay on directors’ remuneration in the corporate laws of Japanand Ontario. While the theme of course is fitting for a micro-comparative
narrative, the author is able to properly set the different progression of the same
rule in two apparently completely different legal systems under the lenses ofmacro-comparison, using his analysis as a tool to test the limits and recent
evolutions of ‘legal families’ theory.
Finally, Franco Serena dives into one of the ‘hot topics’ in the scholarly debate
in Japan: the reform of the Japanese Civil Code in light of the United Nations
Convention on Contracts for the International Sale of Goods (CISG). One of thedeclared reasons behind the reform was to align Japan with international
standards, and in this light the paper is able to clearly trace the direct influenceof the CISG on some specific provisions.
In crafting this special issue we have tried to find a proper balance between
thematic consistency and a wide offer of themes and suggestions: some papers
deal with either Japan or Italy, or both. Some of them use these countries just asa mirror to reflect on broader issues in comparative law. If any reader is to findthis balance inadequate, I assume full responsibility.
As Guest Editor and member of the Japanese-Italian Association for the
Study of Comparative Law I am deeply grateful to the Italian Law Journal for
hosting our contributions. In recent years, the academic exchange between Italy
and Japan has been constantly strengthening, and this Special Issue is a further
step in this exciting journey of mutual understanding and intellectual challenge.

Legal Systems and Legal Families:
Italy and Japan in Comparative Perspective
Andrea Ortolani*

Abstract
This article analyses the role and the significance of taxonomies in modern comparativelaw, taking the classification of Italy and Japan as examples.
The first part explains the concepts and purposes of taxonomies in science and incomparative law.
The second part analyses the reasons why Italy and Japan are often classified as
civil law countries as well as the significance for comparative law scholars and Japanese
law specialists in particular of calling Japan a civil law country.
The final part reviews the latest trends in taxonomic projects in comparative law
and offers legal taxonomic pluralism as an approach to mitigate the problem ofcontradictory taxonomies.

I.

Introduction

This article is divided into three parts.
The first part reviews the concepts and purposes of taxonomies and includes
examples of the use of taxonomies in science and in comparative law.
The second part reviews the reasons Italy and Japan are often classified as
civil law countries as well as the significance for comparative law scholars, andJapanese legal scholars especially, of calling Japan a civil law country.
The third part reviews the latest trends in taxonomic projects in comparative
law and offers an approach to mitigate the problem of contradictory taxonomies.
II. What are Taxonomies?
1. Taxonomies in Science
Most, if not all, cultures name and classify things and concepts. Classifying
things is the implicit foundation of cognitive processes.1 It is crucial to the* Assistant Professor of Comparative Law, Keio University, Faculty of Law. The author
wishes to express his gratitude to Cynthia Walker (LLB, Cambridge University, Visiting Scholar,
Harvard Law School) for the tremendous editorial work she did for this article.
1 P. Lambe, Organising Knowledge: Taxonomies, Knowledge and Organisational Effectiveness(Oxford: Chandos Publishing, 2007); G.C. Bowker and S.L. Star, Sorting Things Out: Classification

2018]

Legal Systems and Legal Families

8gathering and communicating of information.2
Taxonomies are an important part of natural history and science. The systemdevised by Carolus Linnaeus in the eighteenth century is firmly established as theway of naming and classifying species of animals and plants.3 In the same
century, Georges Louis Leclerc de Buffon’s thirty-sixth volume Histoire naturelle(published 1749-1789) offered a dynamic account of the earth’s formation as
well as the changes over time and distribution over the globe of animals, plants
and minerals.4 A century later, Darwin’s theory on the origin and evolution of
the species advanced these natural history projects greatly by providing an
explanation of how living beings change in time.
The Linnaean taxonomy and Buffon’s natural history, together with Darwin’s
evolutionary theory, were spectacularly successful and were received and adopted
well beyond the fields in which they were developed.5 They, or at times theirvulgarized versions, had a considerable impact on social sciences, including
jurisprudence and comparative law.6 The influence of Linnaeus, Buffon andDarwin is evident in two types of inquiries commonly performed by comparative
law scholars.
The first, echoing closely the Linnaean taxonomic project, is the synchronic
analysis, in which legal systems are analysed and sorted into groups and subgroups.
These groups and subgroups are then labelled with various names, producing
as a result a map of the world’s legal systems.
The second is the diachronic analysis, in which the inquiries focus on theevolution of legal systems. This approach is influenced by Linnaean taxonomy
insofar legal taxonomies are taken as the starting point of the inquiry. However,this approach recalls Buffon’s Histoire naturelle when it adds historical andand Its Consequences (Cambridge, Massachusetts-London: The MIT Press, 2000); K.D. Bailey,
Typologies and Taxonomies: An Introduction to Classification Techniques (Thousand Oaks:
SAGE Publications Inc, 1994).
2 P.L. Farber, Finding Order in Nature: The Naturalist Tradition from Linnaeus to E.O.
Wilson (Baltimore, Md: Johns Hopkins University Press, 2000), 1.
3 W. Blunt and W.T. Stearn, Linnaeus: The Compleat Naturalist (London: Frances Lincoln
Publishers Ltd, 2004); P.L. Farber, n 2 above, 1.
4 T. Hoquet, Buffon: Histoire naturelle et philosophie (Paris: Honoré Champion, 2005);
P.L. Farber, n 2 above, 19.
5 Hayek claims that it was in fact Darwin who borrowed the concept of evolution from thesocial sciences and applied it to biology: F.A. Hayek, Law, Legislation and Liberty, Volume 1:
Rules and Order (Chicago: University of Chicago Press, 1978), 22. This first borrowing is notwidely known, probably because of the spectacular success of the theory of evolution in biology
or of the discredit around the idea of ‘social Darwinism’. Therefore, the notion of evolution by
natural selection is nowadays associated with Darwin and not with the ‘Darwinians before
Darwin’ as Hayek refers to the eighteenth century moral philosophers and the historical schoolof law and language, citing August Schleicher and Max Müller: ibid 23, fn 33.
6 H.P. Glenn, ‘The Aims of Comparative Law’, in I.M. Smits ed, Elgar Encyclopaedia of
Comparative Law (Cheltenham: Edward Elgar Publishing, 2nd ed, 2012), 67; R. Michaels, ‘The
Functional Method of Comparative Law’, in M. Reiman and R. Zimmermann eds, The Oxford
Handbook of Comparative Law (Oxford: Oxford University Press, 2006), 339-382.

9

The Italian Law Journal[Special Issue

geographic dimensions to the picture. There are also frequent references to theDarwinian theory of evolution. Sometimes they are explicit.7 Sometimes they
are not explicit or even intentional. Yet the mere use of keywords such as ‘evolution’or ‘adaptation’ in legal writings cannot fail to evoke Darwin’s evolutionary theory.8
Comparative law does not rely on one dominant taxonomy or one original
theory of legal evolution in contrast to how the majority of natural science scholars
recognize those based on Linnaeus and Darwin. There are many ways of classifying
the world’s legal systems and of explaining their evolution. Some have beenborrowed from Linnaeus and Darwin,9 but the different methodologies haveproduced different results.
Limiting this inquiry to modern taxonomies, we can see that the civil law
and the common law group are present in most, if not all, recent taxonomies.10
The Islamic law group is another quite ubiquitous one. All comparative legal
scholars are familiar with other groups such as African, Confucian or Eastern
Asian, Hindu and Socialist law. It was not always like this: the fathers ofcomparative law identified fewer groups, mostly due to their lack of knowledge
about non-European law. More groups have been identified as the discipline ofcomparative law has expanded. Undoubtedly, still more groups will be identified.11
Japan is often defined as a civil law country.12 Even the authors who stressthe distinctiveness of Japanese culture and its influence on the law of the
7 E.D. Elliott, ‘The Evolutionary Tradition in Jurisprudence’ 85(1) Columbia Law Review,
38-94 (1985); H. Hovenkamp, ‘Evolutionary Models in Jurisprudence’ 64 Texas Law Review,
645 (1985); M. Zamboni, ‘From Evolutionary Theory and Law to a Legal Evolutionary Theory’ 9German Law Journal, 515 (2008); M. Barberis, ‘Evolutionist Jurisprudence (Legal Epistemology)’
Encyclopedia of the Philosophy of Law and Social Philosophy (Dordrecht: Springer, 2017), 1-7.
8 The evolution of the common law is sometimes explained in Darwinian terms. It is seen
as a process of elimination of the least efficient rules through adjudication, just like species evolve
eliminating of the least adaptive traits through natural and sexual selection. M. Barberis, ibid 7.
9 See n 11 below.
10 As noted by Pargendler, it was not always thus. The summa divisio between civil law
and common law emerged in the twentieth century: M. Pargendler, ‘The Rise and Decline ofLegal Families’ 60 The American Journal of Comparative Law, 1046 (2012).
11 It is of course impossible to cite here all the works that presented legal taxonomies. Some
reviews of the literature on taxonomies can be found in: L.J. Constantinesco, Traité de droit
comparé (Paris: Economica, 1983), III; C. Varga, ‘Taxonomy of Law and Legal Mapping: Patterns
and Limits of the Classification of Legal Systems’ 51 Acta Juridica Hungarica, 253-272 (2010);
M. Pargendler, ibid; M. Siems, Comparative Law (Cambridge: Cambridge University Press, 2014),72.
12 The statement is commonly found in the literature, especially that written by Japanesescholars and is deemed so obvious that it often comes without a citation. See, for example,
among recent works in English by Japanese scholars: J. Shimizu, ‘Common Law Constitutionalism
and Its Counterpart in Japan’ 39 Suffolk Transnational Law Review, 1-46 (2016); S. Matsui,‘Constitutional Precedents in Japan: A Comment on the Role of Precedent’ 88 Washington
University Law Review, 1669 (2011); M. Kamiya, ‘Chosakan: Research Judges Toiling at theStone Fortress’ 88 Washington University Law Review, 1618 (2011); Y. Hasebe, ‘The Supreme
Court of Japan: Its Adjudication on Electoral Systems and Economic Freedoms’ 5 International
Journal of Constitutional Law, 299 (2007).

2018]

Legal Systems and Legal Families

10archipelago do not deny that from the second half of the nineteenth century theJapanese legal system has been by and large modelled on Western patterns andthat now shares many features with European legal systems.13 While Japan issometimes a ‘victim’ of these characterizations,14 it is useful to assess whether
this view is correct, and if so, what information that it conveys.
2. Usefulness of Legal Taxonomies
Since most comparative law textbooks divide legal systems into groups,
many law students acquire their first notions about the world’s legal systems
according to those groups.
While it is obvious that every legal system possesses some special characteristics
or original institutions, most legal systems have features that are similar or
equivalent, when not identical, to those of other legal systems. Therefore it ismore practical to start learning about foreign law by focusing on what legal systems
have in common, thus creating a map of the world’s legal systems based on thesimilarities between systems.15
After having identified some groups and built a rough map of the various
groups,16 the next step should be to focus on the similarities and differences amonglegal systems within the groups, ie on the original traits of each legal system. By
adding details, one can obtain a deeper and more accurate picture of each group.
Thus, legal taxonomies serve a distinct didactic purpose, as they greatly
simplify the description of the world’s legal systems.17 Three other reasons also
support the utility of creating and maintaining legal taxonomies.
The first basic reason is related to the identity of a particular system. By
claiming that a certain national legal system belongs to a certain group, the identityof that legal system is clarified. Finding differences between legal systems or,more broadly, between cultures is an effective way of establishing a community’s ornation’s identity.
The second basic reason is practical. A search for a correct division into
groups is justified for the practical reason that it can help predict the success of
13 For a recent example, H.P. Glenn, Legal Traditions of the World: Sustainable Diversity
in Law (Oxford-New York: Oxford University Press, 5th ed, 2014), 345. More nuanced: J.H.
Merryman and R. Pérez-Perdomo, The Civil Law Tradition (Stanford: Stanford University
Press, 3rd ed, 2007), 4.
14 Japan is often seen as an exotic legal system. The abundance of literature on it makes it
easy for the non-specialist to discuss Japan as an ornamental example or counterpoint. For the
specialist of Japan, however, such literature often just adds superfluous noise or perpetuatessurpassed clichés. See G.F. Colombo, ‘Japan as a Victim of Comparative Law’ 22 Michigan
State International Law Review, 731-753 (2013).
15 G. Danneman, ‘Comparative Law: Study of Similarities or Differences?’, in M. Reiman
and R. Zimmermann eds, n 6 above, 383–419.
16 See M. Siems, n 11 above, 73.
17 K. Zweigert and H. Kötz, Introduction to Comparative Law (Oxford: Oxford University
Press, 1998), III.

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legal transplants. It has been suggested that transplants have a higher probabilityof success when made between countries that share common features and areclassified together in the same group.18
However, this may not always be the case. Many historical examples showthat transplants may occur between legal systems that are commonly classified
in different groups and not believed to share the same legal culture.19 Japan is
an example of this type of reception.
A third basic reason for the popularity of taxonomies can be found in thefact that the very act of naming and classifying things should indicate anunderstanding of and competence about what is named and classified, ie acertain field of knowledge.
Finally, taxonomies and divisions into groups may also be related to thephysical nature of books and to long-established conventions of how books are
structured. Books are made of pages which are conventionally organized into
paragraphs, chapters, sections, etc. As the contents need to mirror that structuresomehow, it is natural to have legal systems also divided into paragraphs,
subparagraphs, chapters, etc and then classified into larger groups such as civil
law, common law, etc. This way legal families will coincide with sections or larger
parts of books, and mundane elements such as editorial conventions may exert
a subtle influence on how the contents are conceptually arranged.
3. Problems with Legal Taxonomies
The International Congress of Comparative Law of 1900 in Paris transformed
comparative law scholarship into a modern and mature branch of jurisprudence.
Many participants at the Congress saw the search for a taxonomy of the world’s
legal systems as a central mission for the young science of comparative law.20
Scholars painstakingly started looking for the soundest methodologies andthe most convincing criteria into which to divide the world’s legal systems. Thesemethodologies and criteria had to be grounded on firm theoretical foundations
and have clear explanatory value.
However, many criteria have been followed in the history of comparative
law: quot capita, tot sententiae.21 Distinctive aspects of the groups of legal systems
include historical features and development, geography, structural features of thelegal systems, and various aspects of the culture of which the legal system is a part.
18 M. Siems, n 11 above, 73; U. Mattei, ‘Three Patterns of Law: Taxonomy and Change in
the World’s Legal Systems’ 45 The American Journal of Comparative Law, 5-44 (1997). On
transplants in general see M. Graziadei, ‘Legal Transplants and the Frontiers of Legal Knowledge’
10 Theoretical Inquiries in Law, 723-743 (2009); A. Watson, Legal Transplants: An Approach toComparative Law (Athens: University of Georgia Press, 1993).
19 A. Watson, Society and Legal Change (Philadelphia: Temple University Press, 2nd ed,2010).
20 M. Pargendler, n 10 above.
21 ‘Many heads, many opinions’.

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Legal Systems and Legal Families

12Some scholars propose complex taxonomies based on more than one criterion.22
Taxonomies presented in the past are regularly revised by younger
generations of scholars who present new taxonomies, which in turn are abandoned
by following generations, etc. The search for the one convincing and conclusive
taxonomy of the world’s legal systems reminds one more of the endless task of
Sisyphus rather than the Popperian ideal of marginal scientific progress throughfalsifications and refutations.23
Divergences emerge not only in the methodologies and results of the inquiries
but also about which term is the most accurate and should be used to define thegroups of systems resulting from the classification.24 Legal families, legal systems,
grands systèmes de droit,25 and legal traditions26 are among the most common.
The list is made more complex by the multiplicity of languages used bycomparative law scholars. In fact, while ‘family’ can be translated into the French‘famille’, the German ‘Familie’, the Italian ‘famiglia’ and the Spanish ‘familia’
relatively easily and with relatively little loss of information between the languages,
it is not always so easy or straightforward to translate ‘legal family’, ‘legal tradition’or ‘grand système de droit’ into a language such as Japanese. The opposite isalso true: translating ‘hozoku’, ‘hoken’, or ‘hotaikei’ poses specific problems forthe comparative law scholar who keeps an eye on Japan.
Finally, legal systems are always evolving. Today’s mapping can easily become
outdated tomorrow because of reforms, revolutions, or small, incremental changes
in any of a legal system’s formants.27
III. Italy and Japan as Civil Law Countries
1. Italy and the Civil Law Tradition
Italy has long been considered a civil law country. While Italy as an independentand unified state emerged only in the second half of the nineteenth century, theItalian legal tradition predates the proclamation of the Kingdom of Italy in 1861.
Italy and the civil law tradition are generally seen as inextricably linked for
22 J. Husa, ‘Legal Families’, in J.M. Smits ed, n 6 above, 491-504.
23 A reference to Popper and the idea of progress of science through marginal improvements

is found also in M. Siems, Comparative Law (Cambridge UK: Cambridge University Press,
2014), 74.
24 In order to take a neutral approach, this article up to this point has used the expression‘legal system’ to mean the formal law of a state, and did use the term ‘group’ as a neutral
synonymous of legal tradition, grand système de droit, legal family.
25 R. David, Les Grands Systèmes de Droit Contemporains: Droit Comparé (Paris: Dalloz,
1964).
26 P. Glenn, n 13 above.
27 R. Sacco, ‘Legal Formants: A Dynamic Approach to Comparative Law (Installment I ofII)’ 39 The American Journal of Comparative Law, 1-34 (1991); Id, ‘Legal Formants: A Dynamic
Approach to Comparative Law (Installment II of II)’ 39 The American Journal of Comparative
Law, 343-401 (1991).

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historical and geographical reasons. The consensus among legal historians andcomparative law scholars is that the civil law tradition itself originated in the
Italian peninsula. From the eleventh to the thirteenth century, Italian jurists wereamong the most prestigious in Europe. Their methodology, known as the mositalicus, was the standard method of studying law for centuries. The way oforganizing legal education conceived in the Bologna Law Faculty was adopted
in all continental Europe. Legal scholarship was a European phenomenon, andits language was Latin. No political entity represented Italy as a whole: any
reference was simply geographical. One could argue that it is not possible to talkof an ‘Italian tradition’ since there was no ‘Italian’ legal system. However, startingat the latest from the publication of legal treatises in Italian in the seventeenth
century,28 it seems undeniable that Italy had a distinct legal tradition despite its
political fragmentation and the absence of a formal legal system applicable tothe entire peninsula.
Over time foreign law influenced the Italian legal tradition, especially French
and German law and jurisprudence.29 Comparative legal research shows what
were the formants most affected and in what periods. In recent years, theinfluence of Anglo-American law has been more pervasive.
However, the reforms in several areas of Italian law through provisions
inspired by Anglo-American law have not been sufficient to alter the generalperception of Italy as a civil law country. In the many mappings of world legal
systems in comparative law history, when Italy is not classified as a civil law
country, it is because it is absent from the picture or because the name of thefamily is not ‘civil law’ but ‘French’ or ‘Romano-Germanic’ family. The substancedoes not change: these classifications are subsets or substantially equivalent towhat lately is conventionally called the civil law family. At the moment there are
no classifications where Italy is part of the Islamic family, the Far Eastern
tradition, or even the common law family.30
2. Japan as a Civil Law Country
The profound political and social changes known as Meiji Restorationtransformed Japan from an agricultural, poor and secluded country into a
28 The first major works in jurisprudence written in the Italian language are those written
in mid sixteenth century by G.B. De Luca: A. Padoa-Schioppa, A History of Law in Europe:
From the Early Middle Ages to the Twentieth Century (Cambridge-New York: Cambridge
University Press, 2017), 291. It is worth noting that some of the oldest existing documents
written in the Italian language are legal documents: the ‘Placiti Cassinesi’, four short judicial
opinions written between nine hundred and sixty and nine hundred sixty-three.
29 R. Sacco, ‘Modèles français et modèles allemands dans le droit civil italien’ 28 Revueinternationale de droit comparé, 225-234 (1976).
30 More on this later. See also M. Siems, ‘Varieties of Legal Systems: Towards a New
Global Taxonomy’ 12 Journal of Institutional Economics, 579-602 (2016), in which Italy is apart of the ‘European legal culture’ cluster.

2018]

Legal Systems and Legal Families

14

modern industrialized state.
The legal system was revolutionized. In three decades, Japan built a fully
functional, modern legal system and enacted its first modern Constitution, codesand statutes covering all areas of law. Japan was able to do so thanks to thetireless work of its young elites and to the valuable assistance from foreign legal
advisers invited by the government.
The literature on the birth of the modern Japanese legal system in the Meiji
period is extensive. It shows that for the most part it was not a process of creationof original institutions and rules, nor it was a meticulous and fine-tuned adaptationof the existing laws to the new social order. It was by and large a massive adoptionof foreign models, with two exceptions.
The first exception was the obvious need to adapt the imported rules to the
local needs. The elites wanted to modernize and strengthen the country, without
granting too many civil rights and liberties to the people. This was evident inareas such as family law and successions, or in the constitutional law provisions
on the Emperor’s powers and on civil liberties.
The second exception was the lack of a fully developed legal lexicon in theJapanese language. The Japanese intellectuals and legal scholars of the time had
to create the words to express the legal concepts of foreign legal science that they
were introducing. The creation of a refined lexicon proved to be a more difficult
task than the mere translation of the words needed to draft the Constitution of
the young Meiji state.
The legal systems taken as models were the continental European legal
systems, in particular the French and German systems.31 These gave the Japanese
legal system the appearance of a continental European legal system.
The classification of modern Japan as a civil law country has been proposedsince early times. Nobushige Hozumi, one of the leading figures in the legal
modernization of Japan,32 was among the first proponents of this view. In a
paper presented at the International Congress of Arts and Science of 1904 in
Saint Louis, he explicitly addresses the issue of the position of the Japanese
Civil Code among the legal systems of the world.33 After having identified
31 This is a well-known, and generally uncontroversial fact. The literature is extensive.
32 N. Hozumi was born in rural Japan in 1855. After attending a governmental elite school, he

was sent to England to study law in 1876. There, besides attending lectures, he was admitted to
Middle Temple and qualified as a barrister in 1879. Hozumi then moved to Berlin to study
German law for a year and went back to Japan in 1881. In 1882, he was the first Professor of
Jurisprudence at the Imperial University of Tokyo, and the first doctor of laws in Japan in
1888. In the 1890s he was one of the three drafters of the Civil Code of Japan. He was appointed to
the Japanese House of Peers (kizokuin) and to the Privy Council (sumitsuin). See H. Aoki,‘Nobushige Hozumi: A Skillful Transplanter of Western Legal Thought into Japanese Soil’, in A.
Riles ed, Rethinking the Masters of Comparative Law (Oxford, UK-Portland, Oregon: Hart
Publishing, 2001), 129-150.
33 N. Hozumi, The New Japanese Civil Code, as Material for the Study of Comparative
Jurisprudence. A Paper Read at the International Congress of Arts and Science, at the Universal
Exposition, Saint Louis, 1904 (Tokyo: Tokyo Printing Co, Ltd, 1904).

15

The Italian Law Journal[Special Issue‘seven Great Families of Laws namely, (1) the Family of Chinese Law,
(2) the Family of Hindu Law, (3) the Family of Mohamedan Law, (4) the
Family of Roman Law, (5) the Family of Germanic Law, (6) the Family of
Slavonic Law, (7) the Family of English Law’,34
he states that with the legislation of the Meiji period ‘Japanese law was atthat time rapidly passing from the Family of Chinese law to the Family ofEuropean laws’.35 A few paras later, after a brief summary of the achievementsof Japanese legal science in the 1890s, Hozumi states that‘the new Japanese Civil Code stands in a filial relation to the European
systems, and with the introduction of Western civilization, the Japanese
civil law passed from the Chinese Family to the Roman Family of Law’.36
This conviction is repeated in the conclusion: ‘Within the past thirty years,
Japanese law has passed from the Chinese Family of Law to the European
Family’.37 Hozumi qualifies his position in the final lines, stating that ‘the Codeis only a skeleton of law’ and that ‘Law is national or territorial, but the scienceof law is universal, and is not confined within the bounds of any state’.38
However, the general message one gets from his paper is that the transition ofJapan from the Chinese to the European family was completed.
The idea of Japan as a civil law country became commonplace in the early
20th century.39 Even the authors who stress the uniqueness of Japanese culture
and the influence of centuries of indigenous tradition on the law of the Japanesearchipelago, do not deny that the modern Japanese legal system has beenmodelled on Western patterns and that it now shares many of its features witharchetypical civil law systems such as France or Germany.40
The characterization of the Japanese legal system as the result of the adoptionof continental laws was, and still is, influential in a different but very profoundway: for decades the most brilliant young legal scholars of Japan overwhelmingly
chose France or Germany as their destinations to spend a period of study abroad.
They became professors of law with solid backgrounds in French or German
law, breeding new generations of scholars who again specialized in French or
German law. This was for decades a self-reinforcing loop that is only recently

34 ibid.
35 ibid (italics in the original).
36 ibid 19 (italics in the original).
37 ibid 71.
38 ibid 73.
39 Some of the most straightforward paras on the civil law-oriented character of Japanese

law in the first half of the 20th century can be found in K. Takayanagi, ‘Contact of the Common
Law with the Civil Law in Japan’ 4 The American Journal of Comparative Law, 63 (1955).
40 n 11 above.

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Legal Systems and Legal Families

16

apparently partially losing its influence.41
There are also works in which comparative scholars do not classify Japanas a civil law country. In these mappings, Japan is sometimes a member of the
Confucian or Mongoloid family or sometimes of the far Eastern tradition.42 The
geographical location of Japan is an indisputable fact, and it influences theperception and image of its legal system. Sometimes, the distinction is madebetween the Japanese legal system, modelled on Western patterns, and theJapanese legal culture, categorized among non-Western legal cultures in thesubset ‘Asian legal culture’.43 These classifications clearly focus on the persistenceof pre-modern traditions as components of the current legal system.
Japan was under American military occupation from 1945 to 1952. The
current Okinawa prefecture was under American control until 1972. A largepart of modern statutory Japanese law finds its origins in American influences
and was drafted following American models. The current Constitution is the
typical example. Other areas of statutory law (eg criminal law, criminal procedure,
antitrust law, as well as the court structure) were – at least on paper - deeply
influenced by American law.44 This may be not enough to classify Japan as acommon law country, but it surely adds important details to the understandingof the Japanese legal system.45
3. Italy and Japan: Two Civil Law Countries?
Although there appears little room for discussion as to whether or not Italy
is a civil law country, can Japan also be called a civil law country? Clearly, Japanis not a common law country, nor a country of the Islamic, Talmudic or Chthoniclegal traditions. Thus, it would appear that Japan can be called a civil law country
41 Of course, English and American law have been studied in Japan since early times. In
addition to classes in French and German law, top Japanese universities have had chairs orclasses in English or Anglo-American law. However, especially in the first half of the 20th century,
professors with a background in continental law were the majority. Often the French and German
legal doctrines were seen as directly applicable to Japan, while the common law doctrines wereconsidered extraneous and not directly applicable to Japan.
42 See M. Siems, n 11 above.
43 M. Van Hoecke and M. Warrington, ‘Legal Cultures, Legal Paradigms and Legal Doctrine:
Towards a New Model for Comparative Law’ 47 International and Comparative Law Quarterly,495-536 (1998).
44 See T. Kinoshita, ‘Introduction The Reception in Japan of the American Law and Its
Transformation in the Fifty Years since the End of World War II’ 26 Law in Japan, 1-13 (2000),
and all the arts featured in the special section ‘The Reception in Japan of the American Law
and Its Transformation in the Fifty Years since the End of World War II’ 26 Law in Japan, 1474 (2000).
45 A short, balanced depiction of the Japanese legal system and its influences is made by
H. Oda, Japanese Law (Oxford: Oxford University Press, 2009), III, 1-9. See also the excellent
analysis of the binding force of precedents in Italy and Japan made by Colombo in G.F. Colombo,‘Nomophilacy and Beyond: Comparative Reflections on Judicial Precedents by Supreme Jurisdictions
in Italy and Japan’ 2 European Journal of Comparative Law and Governance, 281-315 (2015).

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because there are no better choices available.
However, such a reference to Japan is often followed by references to thepersistence of the Confucian cultural background or to the undeniable fact that
the Japanese archipelago lies in East Asia. A statement like ‘Japan is a civil law
country but…’ is not wrong, but it seems to convey too little information.
Japan could perhaps be put in a class on its own. However, a legal family
made of only one country does not appear to be a convincing example of taxonomy.
This reflection on Japan leads us to review the importance and role oftaxonomies in comparative law and to search for possible solutions to theconundrum of taxonomies as ‘useful but wrong’.
IV. New Approaches to Taxonomies
1. Recent Trends
Comparative law is a discipline that still cannot provide results for what a
century ago was seen as one of its fundamental goals. On the contrary, the morecomparative law progresses, the further from reaching conclusive results it appears
to be. This has led some prominent comparative law scholars, including early
proponents of the taxonomic project, to acknowledge its limits or to declare its
failure.46
Other scholars have not given up and have advanced new perspectives ontaxonomies and new approaches. The debate has never ceased. In fact, newapproaches to the traditional, list-based approach to taxonomies have produced
interesting, innovative results. Ugo Mattei 47 and Werner F. Menski 48 haveproposed visual representations of legal systems. Jaakko Husa has proposed asingular taxonomy based on a matrix49 although in his latest works he seems totake a different and more nuanced approach to taxonomies and legal families.50
In the recent comparative law literature on taxonomies and legal families
three trends are recognizable.
The first trend is the attempt made, primarily by economists, to measure
the relationship between legal institutions and economic development. Thisapproach produced the highly controversial body of literature going under the

46 L.J. Constantinesco, n 11 above, 153; M. Siems, n 11 above, 88.
47 U. Mattei, n 18 above.
48 W.F. Menski, Comparative Law in a Global Context: The Legal Systems of Asia andAfrica (Cambridge: Cambridge University Press, 2006).
49 J. Husa, ‘Classification of Legal Systems Today – Is It Time for a Memorial Hymn?’ 12
Revue Internationale de Droit Comparé, 54 (2004).
50 J. Husa, ‘Family Affair – Comparative Law’s Never Ending Story?’ Annuario Di Diritto
Comparato e Studi Legislativi, 25 (2014); Id, A New Introduction to Comparative Law(Oxford-Portland: Bloomsbury Publishing, 2015); Id, ‘The Future of Legal Families’ Oxford
Handbooks Online: Law (Oxford: Oxford University Press, 2016), 1.

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Legal Systems and Legal Families

18label of ‘legal origins’ or ‘law and finance’.51 The weaknesses and limitations of
this literature have been already discussed by others.52 Among comparative law
scholars there is a general scepticism over the methodology and results of thisapproach. What is relevant to point out here is that, according to the ‘legal
origins’ literature, legal taxonomies are the starting point of the analysis rather
than the original result of an innovative approach. Legal families are taken for
granted, not questioned critically. In brief, this line of research does not help us
find new approaches to taxonomies.
The second trend is the adoption of quantitative methods in comparative
law research. This is perhaps affected by the literature on legal origins53 and ispart of a general trend towards a wider, more refined use of quantitative methods
in the social sciences. Of course, legal scholars have known statistics and usedthem in their analysis for decades. Especially in the Anglo-American world, theeconomic analysis of law has long been a well-known and widespread approachto legal studies. However, the application to comparative law of more refinedquantitative and empirical approaches is relatively recent.54 Mathias Siems writesof ‘numerical’ comparative law55 to stress how numbers can be used to measure
what so far comparative lawyers analysed and described through qualitative
methods. Examples of where this approach has been applied would include thethoughts on the impact of foreign ideas or the similarities between and differencesamong legal systems.
Siems has proposed a legal taxonomy based on a number of variables fromcertain datasets that he has then combined using the method of network analysis.56
The result is a legal mapping made of four clusters: the European legal culture
cluster, the rule by law cluster, the mixed legal systems cluster, and the weak
law-in-transition cluster.
51 The literature on the topic is now too extensive to be cited properly. The first paper ofthis current is usually considered R. La Porta et al, ‘Law and Finance’ 106 Journal of Political
Economy 1113–1155 (1998). See also R. La Porta et al, ‘The Economic Consequences of Legal
Origins’ 46 Journal of Economic Literature, 285-332 (2008).
52 For a review of the literature, see N. Garoupa et al, Legal Origins and the Efficiency
Dilemma (New York: Routledge, 2016); M. Schmiegelow and H. Schmiegelow, Institutional
Competition Between Common Law and Civil Law: Theory and Policy (Heidelberg: Springer,2014). See also the works collected in Annuario di diritto comparato e di studi legislativi 2012
(Napoli: Edizioni Scientifiche Italiane, 2012).
53 R. Michaels, ‘Comparative Law by Numbers? Legal Origins Thesis, Doing Business Reports,
and the Silence of Traditional Comparative Law’ 57 The American Journal of Comparative
Law, 765-795 (2009).
54 The Journal of Empirical Legal Studies started being published in 2004. The body ofliterature in this field is mostly published after the 2000s. See R.M. Lawless et al, Empirical
Methods in Law (New York: Aspen Publishers, 2016); H. Spamann, ‘Empirical Comparative
Law’ 11 The Annual Review of Law and Social Science, 131-153 (2015).
55 M. Siems, ‘Numerical Comparative Law: Do We Need Statistical Evidence in Law inOrder to Reduce Complexity’ 13 Cardozo Journal of International and Comparative Law,521-540 (2005); M. Siems, n 11 above.
56 M. Siems, n 30 above.

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While this approach is stimulating, it also involves a certain degree ofarbitrariness on the part of the researcher that inevitably is reflected in the results.
This can be seen in crucial areas such as how laws and rules are converted into thenumbers fed into the datasets, how the variables interact among them, or how
the variables themselves are chosen. As recognized by the author himself, ‘even
when we identify community structures such as clusters, this does not denypossible ambiguities’.57
The third trend originates from a more refined understanding of thefundamental problem with any approach to taxonomies, ie the problem ofdefinitions and scale. In creating the taxonomy, how should we define the basic
unity of inquiry, ie the legal system? What are its boundaries? When the taxonomic
project was launched, comparative law took it for granted that the comparison
had to be made between national legal systems.58 In 2018 this is no longer thecase. An analysis of mixed and hybrid legal systems shows that state borders are
not always the best markers of the boundaries between legal systems. Usually, acountry’s legal system encompasses many legal systems as the same legal tradition
can often be spread among many countries.
On the other hand, it would be just as unreasonable to ignore the importanceof national borders and legal positivism on the law of an area or people. It goes
without saying that state power, jurisdiction and tribunals have a significant
influence on how law is perceived and practiced in an individual community.
This dilemma is acute when discussing the Japanese legal system. The
depictions of the Japanese legal system vacillate between Japanese law as a
copy of the European models of the 1800s, on the one hand, and Japanese law
as the archetype of a modern industrialized society’s legal system. In the latter
type of legal system traditional, informal rules take over and therefore deprive
state law and written agreements of any value.
The comparative law scholar is then again faced with a choice. Should thescholar choose clarity over accuracy and conduct the analysis utilizing countries
only? Such a choice would obviously be at the expense of a subtle analysis that
could take into account regional differences within a country and differences inreligious, social, economic, linguistic and cultural conditions. Should the scholarchoose accuracy over clarity, thereby bidding farewell to any hope of building
an easily understandable, practical taxonomy?
2. Legal Taxonomic Pluralism
The new trends mentioned above lead to original and insightful results, but
additional new ways to classify legal systems will always be proposed. The existenceof conflicting taxonomies of the world’s legal systems seems unavoidable.
57 ibid 598.
58 M. Reimann, ‘Beyond National Systems: A Comparative Law for the International Age’
75 Tulane Law Review, 1103-1120 (2000-2001).

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Legal Systems and Legal Families

20

However, these conflicting taxonomies result more from different starting points
or the focus of the authors rather than from methodological flaws. Therefore, it
is not possible to say which taxonomy is better than another.
Comparative law could profit from a complete review of the taxonomies
proposed up to the present day, which would bring us closer to a better
understanding of the differences and similarities among systems. Some attempts
have been made,59 but the review has been limited to mainstream sources incertain languages. These reviews are valuable but cannot be said to be complete.
Hence, a complete review would be an important achievement and a rich source of
information from which to start further research.
Unfortunately, there are two main reasons why a review of all taxonomies
is far from being feasible. First, such a review would have to be addressed by ateam of researchers in many countries and should cover all languages withcomparative law materials. Coordination and translation problems might ensue.
Second, because legal taxonomies are found in comparative law works in social
sciences and humanities sources some already published papers could beoverlooked. In addition, when the taxonomy is implied, eg ‘Country A is a civil
law country’, there are no sources cited as the statement is considered so obviousthat it does not need to be supported by a source. A complete mapping would
therefore imply sifting through an enormous quantity of text.
It is possible to imagine that one day a complete review of taxonomies
might be practical through advancements in computer-assisted techniques (opticalcharacter recognition, natural language processing, text mining, etc). Data couldin turn be aggregated and combined in many ways. This would produce innovative
results and new ways of representing groups of legal systems and their relationsin space and time.
As it is not possible to evaluate which taxonomy is more accurate thananother, the only solution left is to recognize the value of each taxonomy according
to the perspective it wants to highlight. After all, each taxonomy is built to answer
a certain question, and the answer is specific to the question (eg a geographicalmapping or a phylogeny). A corollary to recognizing the specificity of eachtaxonomy is the impossibility of having a general, all-encompassing taxonomyof all the legal systems of the world. This is because each taxonomy would be
limited to some aspects of the legal system.60 Many taxonomies can coexist.
This is not a fundamental contradiction and does not bring discredit to the entire
discipline of comparative law. Some can be more revealing or more inspiring,
but all contribute to a better understanding of the multiplicity of the law.
V. Conclusion
59 n 11 above.
60 M. Van Hoecke and M. Warrington, n 43 above, 520.

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Legal studies have embraced legal pluralism as a key to understanding thatmany rules operate at many levels in different legal systems.
From the classifications point of view, all taxonomies are an answer to specificquestions. However, questions and points of view change over time. Legaltaxonomic pluralism shows that contradictions exist because they are in fact
different answers to different questions. Comparative law should embrace apluralist approach to taxonomies as the key to understanding the many different
classifications of legal systems.

The Bleeding of Legal Rules Between Rights and Limits,in the Age of Migration Flows and the Crisis of the
Nations
Antonello Miranda

Abstract
This paper assumes that the modern migratory flows, together with the enormous
circulation of people and rules, still involve the ‘bleeding’ of alien principles and practices on
the canvas of the host legal system. Accordingly the paper investigates the ‘limits’ beyond
which the order ends up responding to the protection of its integrity and within which
the same hosting system welcomes and transpires the ‘discoloration’ or contamination,
evaluating the responses to the bleeding of ‘alien’ rules and assessing the degree ofsystematic coherence and ‘holding’.
The paper looks at what happens in the legal system of the hosting society, namely
to the ‘reaction’ to an ‘imposition’ or to the grafting of models incoming from a given
society or social group. These cases of ‘circulation not institutionalized’ end up not somuch with ‘staining’, but rather with the ‘bleeding’ of the original normative pattern,which may not return ‘immaculate’ and homogeneous as before. The paper also seeks tounderstand why some rules are accepted while others rejected; whether there is an‘instrument’ other than the well-known economic analysis of the law that may measure
the phenomenon; to what extent it is possible for the host system to ‘react’, to ‘inhibit’,or at least to ‘limit’ the ‘bleeding’ effect without renouncing to the respect of rights andfreedoms recognised to all the people.

I.

Introduction: Movement and Enforcement of Legal Models
and Social Changes

At the times in which the traditional practice (Sati) of burning widows on
the death of their deceased husband was still widespread in India, the British
wondered how it was possible to ban or limit this phenomenon without violating
the principle of recognition of local traditions and rules. The typically ‘British’solution was found by the Governor Charles James Napier, who argued against
the local complaints who merely demanded respect for their religious rules in the
country:‘Be it so. This burning of widows is your custom; prepare the funeralpile. But my nation has also a custom. When men burn women alive we

Full Professor of Comparative Private Law, University of Palermo.

2018]The Bleeding of Legal Rules

24

hang them, and confiscate all their property. My carpenters should all
therefore erect gibbets on which to hang all concerned when the widow isconsumed. Let us all act according to national customs’.
This paper assumes that the modern migratory flows, together with theenormous circulation of people and rules, still involve the bleeding of alien
principles and practices on the canvas of the host legal system. Accordingly the
paper investigates the limits beyond which the order (and its socio-cultural
tradition, or its national spirit) ends up responding to the protection of its
integrity and within which the same hosting system welcomes and transpires
the discoloration or contamination, evaluating the responses to the bleeding ofalien rules and assessing the degree of systematic coherence and holding.
My starting point is to assume that the theories of circulation of models andof legal transplants are correct. But, in my opinion those theories look at an ideaof circulation of models in some way dialoguing between legal formants and thepowers of states, and largely dominated by the equalization between statenation-law; in particular, this is true for the theory of imitation and transplantof an alien legal model operated by the political and legal institutions of acountry.
Instead, the paper looks at what happens in the legal system of the hostingsociety, namely to the reaction to an imposition or to the grafting of models
incoming from a given society or social group. It is argued that the possible
change of the composition of a social group, even to a minimal extent, determines acirculation of models outside or regardless of their actual and formal reception
by the institutions, a conclusion that recalls the insights of the well-known theoryof chaos. In my opinion, these cases of ‘circulation not (yet) institutionalized’
end up not so much with staining, but rather with the bleeding of the original
normative pattern, which may not return immaculate and homogeneous asbefore. The paper also seeks to understand why some rules are accepted whileothers rejected; whether there is an instrument other than the well-known
economic analysis of the law that may measure the phenomenon; to what
extent it is possible for the host system to react, to inhibit, or at least to limit the
bleeding effect. In other words, the paper questions whether, how, and to what
extent, the law and society of a given state can react to contamination, without
renouncing to the respect of rights and freedoms recognised to all the people.
This is an actual and serious problem with a high rate of systematic and logicalcontradiction (I am thinking of the French ban on wearing a veil or being
dressed on the beach, but also of the abolition of the crucifix or the Presepio(Christmas crib), Halal slaughtering, the practices of infibulation, the combinationof weddings, polygamy, or polyandry, and so on).
The terrain here is slippery, especially if approached from a purely
juridical-regulatory point of view. There is, in fact, the risk of creating monsters,such as the forced adoptions of the children of dissidents in communist (but not

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only) systems or the automatic deprivation of parental responsibility in the caseof parents who are terrorists or members of the mafia. In this sense, the systematic
coherence and the holding of a system are questioned as such issues are likely
to generate clashes between the formal respect of rules and the denial of rights.
In other words, we are dealing with the ‘dark side of the law’, that is the perverse
and negative effect of the apparent respect of rules.
These contamination phenomena have always existed and to a certain
extent they are also dealt with by the authors of the theories of legal transplantand circulation of models and more recently also of those of the sustainable
diversity and reconciliation of legal traditions. However, the theoretical explanations
to the reception of a model external to the receiving system are usually related
to economic or political justifications.
It is often said that a model has been received for its prestige. While this istrue, it is then necessary to assess whether the prestige of the model does not lie
in the political strength (which also means economic and military) of the country
from which the model is received. In Japan, for instance, both the constitutional
and the commercial law systems follow the common law model, in particular
the American system. It must be noted, too, that Japanese legal system has also
been deeply influenced by the reception of models from civil law systems(French, Italian, German) and for this reason fully belongs to the Western Legal
Tradition. These transplants, however, are rarely the consequence of a free choice
following by the undisputed ‘prestige’ of the model; I would say that here it has
also been very evident the weight of the political and economic strength of agiven country in relation to another one.
We have a lot of examples in this sense and last but not least also the casesof ‘reticular polity’ (as defined by Antonino Palumbo), ie the imposition of
external rules by extra-national entities on sovereign systems that in fact ... arevery little sovereign: this is the case of the rules imposed on Greece by an entitythat is not legally recognized or recognizable (the so-called ‘economic Troika’ ainformal body composed by representatives of the European Commission, theInternational Monetary Fund and the European Central Bank) whose ‘advice(...) hardly can be refused’ as said the protagonist of the beautiful film byFrancis Ford Coppola, ‘the Godfather’.
II. Purity versus Hybridization
The other aspect that I believe must be taken into account is the assumption(which is at the base of the theory of circulation of models and legal transplantbut also at the base of sustainable diversity) that the models are to some extent
unique and linked to a given legal tradition identifiable with a precise system
connected with a state and therefore a nation. Patrick Glenn himself maintains
that the juridical traditions evolve because of the circulation of ideas but each of2018]The Bleeding of Legal Rules

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them remains solidly anchored to certain juridical values, so that in theory it
should be possible to find an identifying nucleus of each tradition (assumingthat the concept of juridical tradition can be precisely identified and defined).1
This is evident, too, if we look at all the classifications of juridical families inthe doctrine: however while we speak of ‘Roman-Germanic family’ in reality weidentify its ancestor in a single particular system ie French law, or rather, to beprecise, in law of French People (the code Napoleon is in fact the ‘Code of theFrench’) and not in the ‘Roman Law Tradition’.2 But it is also evident even if welook at certain phenomena of reception of institutes, first of all, at the receptionof the model of French codification: in the Kingdom of the two Sicilies first andin the Kingdom of Italy then, in fact, the Napoleonic code was literally translated,transplanting it into a reality quite different from that of imperial France.
Similarly, if we look at the common law area, it is easy to consider Englandand its legal system as the ancestor, but even if contemporary England seems tochase the United States, I find it rather difficult to think that its tradition is notbased on values, concepts, and ideas that are typically British, so that Ugo Mattei3says that the rule of stare decisis is pure in the United States but no longer (andI would say that it has never been) in England.
Even in these cases, however, the model is acquired and imposed by a precise
political institution or power and therefore by an elite, but not necessarily by thesociety that composes the state/nation. In these cases, too, it is assumed that thepolitical institution represents the people as a whole and that there is a precise
identification between institution-state and civil society. The public authority
therefore speaks in the name and on behalf of society (I would say in the illusion
generated by the theory of social contract), at least as far as the Western Legal
Tradition is concerned, even if this delegation is also inherent in the Confucian
thought of the sovereign’s good job and so on, according to the different
philosophies and beliefs. It never happened to me to read a study of a power oran institution that openly declares that it is operating for the evil of its own society.
By this I do not mean that the law is a superstructure, on the contrary. I
1 For a strong criticism to the theory of Glenn see N.HD Foster, ‘Introduction’, in W.
Twining et al, ‘A Fresh Start for Comparative Legal Studies? A Collective Review of Patrick
Glenn’s Legal Traditions of the World’ 1(1) Journal of Comparative Law, 100, 103 (2006): ‘Moregenerally, (Glenn) argues that the definition of a legal tradition in terms of a network of information
is limited as regards law, and that the very concept of tradition as information is itself flawed’.
W. Twining, ‘Glenn on Tradition: An Overview’, in Id et al, ‘A Fresh Start for Comparative Legal
Studies? A Collective Review of Patrick Glenn’s Legal Traditions of the World’ 1(1) Journal ofComparative Law, 107, 112-113 (2006), says that: ‘Glenn is perhaps too dismissive of (theconcepts of culture, system, legal family and civilisation), some of which are useful at different
levels of generality’ and that ‘in order to transcend and compare legal traditions, Glenn needs ananalytic concept of the “legal” ’.
2 More than in the law of Rome ... since there is a fine difference between the law of Rome
kingdom compared to the republican and finally to the imperial law.
3 U. Mattei, Stare Decisis: il valore del precedente giudiziario negli Stati Uniti d’America(Milano: Giuffrè, 2008).

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would just like to observe that transplants of norms, circulation of models, flows
of juridical traditions take place anyway. These often take place through theaction of a public power, of an institution (of the state? the nation?) representing
the society.
Accordingly Jürgen Habermas4 says, the ‘Nation’ is born from a free social
contract between ‘peoples’ (but what is a people?) that recognized themselves in
a common Constitution so that even the concept of ‘homeland’ is modified andthe ‘patriotism’ becomes ‘constitutional’: the Nation is therefore such from a
political point of view while the Constitution contains a strong sense of belonging,a series of common institutions, a presumably constancy, and persistence overtime etc.
However, this idea refers anyway to a power of a specific institution thatapparently seems to be pure and identifiable.
In ‘A theory of justice’ of John Rawls,5 for instance, the question of theprotection of rights in a ‘well-ordered society’ is dealt with by using the oldnotion of the rule of law as an ideal type. In this sense, the rule of law requires
the government to exercise its power in accordance with well-established andclearly written rules, regulations, and legal principles.
Even in Glenn’s idea, each single ‘legal tradition’ (that is constituted also by
also cultural, social, beliefs and myths) must be ‘verbalized’, in the sense that inorder to be identified it is necessary to refer to precise political institutions
representing and declaring it.
It is also necessary to declare the transflow of reciprocal influences without
which it is difficult to understand whether and to what extent there has beenmutual influence and, above all, ‘peacefully sustainable’ as Glenn himself
maintains.
Among the main criticisms to Glenn, indeed, there is the accuse to be too
theoretical and not to take into account the current state of western legal
tradition and the reality of the facts. As stated by Nicholas HD Foster,‘anyone with knowledge of a field such as colonial law reception, law
and development or Islamic finance, or indeed to anyone who has everdone a transaction with a major US law firm, the idea of a non-imperialist,
multivalent and accepting Western law tradition seems unrealistically rosy’.6
Having said this, however, we must also admit that as long as we can isolate
the legal system and everyone can boast a dose of ‘own’ autochthonous legal
tradition (in Naples we have a nice way of saying that ...‘even fleas have thecough’, ie even those who are very small raise their voice assuming its diversity
4 J. Habermas, L’inclusione dell’altro. Studi di teoria politica (Milano: Feltrinelli, 2013).
5 J. Rawls, A Theory of Justice (Harvard MA: Harvard University Press, 1999).
6 N.HD Foster, ‘Kindling the Debate on Diversity: Chapter Ten of Legal Traditions of theWorld’, in W. Twining et al, ‘A Fresh Start for Comparative Legal Studies?’ n 1 above, 175.

2018]The Bleeding of Legal Rules

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and originality) in reality I don't think we can say that today there really exists a‘pure’ system. In my opinion, but it is also a matter of fact, we can say that all
the legal systems are ‘hybrids’ in the sense that they have been contaminated byothers, a bit like the ‘cyborgs’ that are not (entirely) robots but are also humandepending on the amount of implants they have received.
As we have seen before, the models as English or French or Roman systems
have lost their purity because, with a rebound effect, they have been influenced
by the same systems that influenced them in a sort of loop (who is passionate
about music knows very well that the rhythm and blues has influenced theBeatles and Rolling Stones that, in turn, ended up influencing the American
rhythm and blues).
This is a historical and concrete fact to which no legal system escapes, as it
is exemplified by, for instance, one can take a look at the history of the Italianlaw or English law. However, it must also be admitted that this phenomenon
has increased in modern times by means of the disappearance of the power ofstates/nation. In reality, the phenomenon is twofold: on the one hand, there is
the hybridization and contamination of all systems due to technological, political,
economic and social changes; on the other hand, there is a real loss of decisionmaking and representative power of the nation that can no longer control its
borders and exert its powers, not even the legislative one, in an absolute andsovereign way.
A few years ago, Professor Stefano Rodotà told us about the existence of a‘set of travel rights’ ie the possibility for individuals to carry in their suitcases
some rights wherever they went. This is a valid thesis and it is emblematic of theperception that the Western jurist has of the permeability or mobility of borders
and of the relative impotence of state powers and also of the futility of nationallaws. To give an example, I think of the historical rule of ‘territorial waters’ thatwere once such because the nation concerned was ‘physically’ able to exercise
its sovereignty by defending the coast with cannons, in the era of missiles it
becomes ridiculous to think that six or twelve miles are an impassable limit. For
this reason, nowadays, the respect of the territorial waters is a question ofinternational politics. Phenomena like this one are today the more frequent
than in the past: the Internet has literally skipped frontiers; technologicaldevelopment allows for an ease of movement that was previously unimaginable;
the circulation of communication is also practically limitless; economic development
and economic degrowth as local political choices create unexpected situations,above all uncontrolled and uncontrollable. There is enough to understand how,not only ‘statutory law’, but also the entire legal systems no longer have control
over the recipients in a sort of ‘orgy of globalization’ that, rather than ‘sustainable
diversity’ based on free choices, it seems forced hybridization due precisely tothe crisis of the state/nation and the development of other (alternative andparallels) centres of power.

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III. Hybridization and ‘Bleeding’On the one hand, what emerges from the above is the presence of various
levels of ‘power groups’ and decision-making groups that work side by side andsometimes replace the legislative and executive powers; on the other hand, we
experience a breakdown of the unity of the people and of autochthonous interests
as well as values. These, instead, are relegated to the background of many legal
systems and are destined to fade.
I have recently travelled to Vietnam and I was very impressed to see
wedding parties in ‘Western style’ with American dances and music, huge shops
for electronic products and any other goods, large buildings, the incredible numberof people who used iPhone continuously: all this in a country that is defined byitself as ‘communist’... and where the organs of the State are still organized in
the original way. In fact, I cannot think that the central power of the State has
accepted, by accordingly amending its laws, the American model, even if thelatter has so strongly influenced the way of life and also the rules followed by
Vietnamese society.
Here more than hybridization we witness what I have called the bleeding(stingimento), that is to say the draining effect, of alien rules, values, myths, andfashions on the canvas of the autochthonous system.
With respect to hybridization or transplantation, the bleeding effect isessentially independent from the effective recognition or import by the ‘powers’of the state. As we have seen, it can be done with the adoption by a given
population or society of alien myths, fashions, cultures, rites, customs, languages,
and habits.
I have already said of Vietnam, but the world is full of such bleedings notnecessarily translated into explicit legal rules.
I think of, for example, the use of English as a lingua franca (even here, infact, we are speaking English. Let’s do an experiment and see who can tell me
how it translates ‘come here’ into Turkish? Or in Latin? Yet in English everyone
knows how to say that. And how do you say ‘contract’ or ‘property’ in Turkish or
Aramaic?). We can also think of the economic and credit mechanisms or of the‘contractual business practices’, ie the ‘common customary rules’ that are followedby companies regardless of (and often even in contrast to) the norms of thelegal system in which they operate.
Today the phenomenon of bleeding has one more form that follows therenewed consistency of migratory flows.
Migration is not infrequent in history (as is the barbarian invasions). Manymodern countries are the result of great migrations. The United States, forexample, are (or perhaps it’s better to say they were) a country that has its strength
in being a melting pot. Italians are also the result of the stratification of many
invasions. Japan, if I am not mistaken, has developed as a result of a Chinese or
Asian influence, even though it has sometimes proved to be suspicious of gaijin.

2018]The Bleeding of Legal Rules

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But, even here, beyond the transplantation of legal rules, there has been a
bleeding of alien rules on an autochthonous canvas. If we look well, Britons tooare ‘sons of an invasion’ and of the stratification of cultures and different ethnic
groups. In other words, no one can claim to be pure.
In the case of contemporary migratory flows, however, there is an elementof novelty as these flows involve the creation of enclaves that remain either
apparently separated from the local social group or, tend to maintain their own
cultural and legal habits. This is probably the consequence of the short life spanof migration and of the difficulties in choosing the country where to settle.
Examples of the first case are the Chinese communities in Italy that havetheir own rules, rites, and customs, and that tend not to open up towards thehost society (at least at an early stage).
Examples of the latter type are, again in Italy, the Islamic religious
communities coming from sub-Saharan African countries or Asia, which often
ended up staying in Italy only because they could not migrate to the countries ofNorthern Europe.
There are also the large communities that have consolidated their presence
and which, despite a reasonable degree of integration, maintain their traditions
and rules. In these cases, the bleeding effect is consequent and functional to thegrowing and consolidation of the alien group.
This phenomenon is even more clear at the level of micro-comparison. Heretoo, we have two possible alternatives: on the one hand, there is a bleeding or
rather a ‘declared’ hybridization, filtered by the powers of the state (I think notonly of the legislative power but also, and I would say above all, of the judicial
and executive power of the states, ie the public administration).
The second alternative consists of the real bleeding, ie the presence of alienrules followed by a given community regardless of native rules that are, anyway,
touched.
Let me give an example to clarify the concept: in Palermo, there is now alarge Pakistani community of Islamic religion. Some of them have begun toengage in small business activities gaining some stability. Obviously these people,(regularly immigrated), rent premises, someone bought an apartment in acondominium, etc. Of course, to do their business, to purchase a house, to renta room, to buy and resell goods, they must comply with the Italian legal provisions
ruling these relationships. But alongside this, the relations within the community
are often governed by the specific rules of that social group. If the owner of therented premises is Pakistani as the tenant is, regardless of the Italian rules, theagreement is often regulated ‘in the Islamic way’. This, in turn, creates a sort ofparallel reality. Obviously, since it is not possible to keep these two realities
separate forever, they end up meeting each other and so alien rules ‘lose color’by bleeding on the canvas of local and indigenous norms.
Thus change the way in which (all) people negotiate, change the opening

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hours, change the competition with large shopping malls of small familybusinesses, change the ‘food’ and product rules (I am thinking of the Halalslaughtering issue), change the cost of labour and the commitment to work.
It goes without saying that in this situation we should ask whether and towhat extent the host legal system can tolerate the bleeding (by declaring
hybridization and thus integrating its own system) or cannot use the ‘bleach’ towash its regulatory pattern.
IV. Bleeding, Hybridization and Dynamics of Systems
As I said before, Glenn believes that a dialogue between systems based on
mutual knowledge and tolerance is possible, even though he admits that eachsystem has its own juridical ‘tradition’. Apart from the criticism of this thesis
and while admitting that there may be a coexistence of parallel systems, I
strongly doubt that in this case, at the end of the day, there is not a minimal
degree of bleeding or a deviation from the original purity of the regulatory
pattern with the risk of its irritation or negative reaction.
When we try to understand why a legal transplant is a success, jurists draw
the concept of efficiency from the economic analysis: the winning rule is the one
that, by allowing the reduction of transaction costs, is the most efficient andconvenient in the economic sense. I am not an economist and I am not very
familiar with formulae and mathematics, but it does not seem to me that thistype of analysis can be applied to all situations, especially when there are interests
involved that are not purely economic. If it were so easy... in theory there should
be no controversy.
In any case, it is difficult to understand the reason for the bearing of bleedingor hybridization or transplantation or the reasons for their rejection only on thebasis of the alleged economic efficiency or inefficiency of the choice.
Who goes with the lame learns to lame or those who lie down with dogs get
fleas, so having a daily attendance with a business economist colleague of mine
and with ... my wife I did a kind of test: I asked both of them to tell me why oursociety should ‘welcome’ a foreign culture or a foreign rule. In fact, my question was
more sneaky, because I had previously asked why, according to them, Americanmusic is so successful in Italy and why, so far, no one is subject to the Islamicprohibition (but once spread among Catholics) of listening to Rock and Roll.
The answer was almost identical: we follow an alien ‘thing’ if it is compatible
with our habits but above all if we ‘like’ it (as my wife says) or improves ourquality of life (as my colleague says) present or future (the Catholic promise ofparadise for the poor, the Islamic promise of virgins; who knows what women
think of it).
We reject what ‘we don’t like’ or what we believe can worsen our quality of life.
In this sense, ‘the individual satisfaction’ plays an important role in the2018]The Bleeding of Legal Rules

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dynamics of systems and can help explain why we continue to use the ‘discoloured’
canvas instead of throwing it away or trying to clean it.
I have no more time to deepen this point, which requires particularknowledge of system dynamics analysis, but I would like to show you threeslides that show the components of the planning and control system and anorganizational system’s model, from which it emerges clearly how the best
results of a complex organization are obtained trying to achieve the individual
satisfaction and the improvement of the quality of life individual and collective.
How and if really succeed... this is another problem.

The P&C system components
ORGANI ZATI ON
FACTORSORGANI ZATI ON
STRUCTURE

ORGANI Z.
EFFI CI ENCY &EFFECTI VENESSHUM AN
FACTORSI NFORM ATI ONSUPPORT
STRUCTUREM OTI VATI ON

SOCI AL
FACTORSPROCESSM ORALE33

The Italian Law Journal[Special Issue

M EASURI NG
PERFORM ANCEGOAL
SETTI NG

Goal vs. Performancecomparison

VARI ANCE ANALYSI SCORRECTI NG
ACTI ON

CHANGI NG
GOALSNOCORRECTI ONSAn Organizational System’s model( adapt ed from Seiler, Syst em s Analysis andOrganizat ional Behavior )Organizational System

Technical

Organizational

SocialInstitutional

Outcome
Variables
Organizational
effectivenessIndividual
satisfaction

Institutional Goals

Individual

Organizational Behavior

Environmental Variables

Context Variables2018]The Bleeding of Legal Rules

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Obviously the dichotomy ‘like/doesn’t like’ or ‘improves/does not improve’
the quality of life has to be seen in a relative and not absolute sense. There is nouniversal category of ‘beautiful’ and what I like, with my cultural background,maybe be disliked by another person. However, there are things that people
love or are considered ‘beautiful’ in relation to a given social group. From ajuridical perspective, the concept of legal tradition comes back powerfully but
this time as seen from below and detached from the restrictive idea of one
state/ one nation/one population/one law.
The social context is also a legal context and the cultural background (in abroader sense) of a society influences the behavior of individuals and theirperception of the quality of life, regardless of whether they are citizens or subjectsof this or that nation or state. The legal tradition is composed by values andbehavior shared in a given historical moment by that social group, not by values
imposed or granted from the top by a more or less strong power.
I do not want to deal here with an issue that would take a long time andwhich is, of course, debatable. However, I will limit myself to observing that it isin the right of private individuals, ie in the right of interpersonal relationships
and not in public or constitutional or criminal law that we find strong, verystrong common values (universal?): property, contract, responsibility, succession,family are all institutions that, in the obvious variability of forms andorganizations, are shared by the people and independent from the presence ofan authority or a central power that ‘recognizes’ them and impose their observance.
The private law rule has the characteristic of spontaneity and bilaterality making it
independent from authority as a product of the same subjects that respect it.
If we add to these shared institutions the variables due to the culturalmodels that each social group develops together with the so called ‘values’ ie theprinciples that allow to achieve the best quality of life (for that particular socialgroup and in that given historical period) we will have a clearer idea of what isthe ‘legal tradition’ or the system of shared rules of the society.
V. The Destiny of Bleeding. Public Order and Morality as
Benchmarks
Having said that, we have some more elements to answer the question ofwhether and to what extent a system can accept the bleeding or should try tocontain or remove it.
The key point is the coherence of the system. Coherence must be seen in
two ways:(a) endogenous consistency, ie coherence between the protection of recognised
rights and the prohibitions or limitations imposed by the legislator on alien rules;(b) exogenous consistency or ‘assessment’ of the degree of compatibility ofalien rules with the principles of the hosting legal system.

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If we stop only at the first aspect, the risk is that of the contradiction of thesystem. In this matter there are well known cases: I take up here the example of
the French law which prohibits the ‘ostentation of religious symbols’ which in
Italy we have, unfortunately, mimicked by ridiculous decisions forbidding the
public exposition of the crucifix as the suppression of ‘Merry Christmas’ wishes
in favour of a more politically correct ‘Good Festive Season’. It is clear that there
is here a systematic contradiction whereby, on the one hand, the legal system
recognises and protects the right to profess one’s religion and, on the other
hand, prohibits the expression of one’s beliefs through the use of religious
symbols or, which I think is even worse, when requires not to wear a burquinion the beach.
In these cases, restrictive interpretations of laws are used to try to prevent aphenomenon, but they enter into blatant contradiction with the proclaimed
principles and guaranteed rights.
Likewise, there is a strong risk of systematic contradiction in cases ofdeprivation of parental responsibility when parents are Mafiosi criminals or
terrorists; the intention is (like in Italy nowadays) apparently good in the sensethat the law (or better the courts), relying on best interest of the child, isconcerned with ‘taking away’ the minor who is not yet trained and mature froman education to hatred or to bad acting. However, even here the contradiction isevident between the protection of the right-duty of parents to educate and toraise their children and the provision to do so according to what the law considers
to be the child’s best interest. With a very serious and concrete risk that construing
literally the law it may be possible to justify the abduction of child of any politicaldissident or even of a simple system protester or a poor thief.
However, this is a typical flaw of civil law systems. Sometimes they are toomuch tied to the letter of the law and less capable than common law of looking
at the ‘heart’ of problems and quickly adapting to social changes. And here wego into the second aspect, that of exogenous coherence.
Faced with the bleeding caused by alien rules, we can assess whether the newsituation is in fact and concretely compatible with the principles of the legal systemand therefore can be tolerated or incorporated within the legal system itself.
This phenomenon was widespread in the common law area but, as a resultof the strong new migratory flows, it is now relevant in many civil law systems
including the Italian one.
The case of the Kafala seems to me emblematic. According to Islam, parents,
in agreement with each other, can entrust the child to someone who is able tocare, instruct and maintain him in the event of their absence or impossibility.
More recently, the child tends to be entrusted to a person residing in European
countries in order to ask for ‘reunification’ and obtain an entry visa for thecountry of the caregiver.
France refuses to recognise Kafala because it considers the adoption as

2018]The Bleeding of Legal Rules

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strictly limited to the only hypotheses provided for by the law and therefore
without looking at the ‘purpose’ for which both adoption and the Kafala aim.
Furthermore French judges hold that in reality the Kafala is a way to circumvent
immigration rules.
In the United Kingdom, judges, assessing the core of the institution andconsidering it essentially identical to the foster, found that the Kafala was inconformity with the law, upholding the request for reunification, rejecting it
only when it was proved that it was an escamotage to obtain the entry visa andnot a real custody.
In Italy, after conflicting decisions, the courts now hold the Kafala to becompatible with our legal system, as it corresponds in the substance to theadoption and therefore does not conflict with the principles of public order.
Other cases, especially of family law, are now widespread due to the number of
migratory flows (I am thinking of the Romanian community, which represents
one per cent of the population in Italy or the four million non-EU foreigners, ie
ten per cent of the population).
The recent data on divorce between former spouses, when at least one ofwhich is not Italian, show how widespread the phenomenon of the contamination
between local and foreign rules is.
Similarly, in England it is possible to let the so-called ‘Islamic courts’ do on
condition that the decisions taken by them are compatible with the generalprinciples of English law.
We have reached the end of this long journey through which we had to run
as Forrest Gump. The topic is complex and would require further in-depth andcritical analysis.
In my opinion, however, a comparative conclusion can be made. As I said,
the main problem with the rules is the assessment of compatibility or
incompatibility with the legal system and the maintenance of the systematic
coherence of the legal system itself.
If we look at the decisions or reactions of the French and Italian system(but I do not doubt that it is the same for all systems of the civil law area) it
seems clear to me that the compatibility or incompatibility are assessed in termsof ‘policy’ rather than in terms of strict law, usually by using the ‘negative’ limitof public order.
If we look at the decisions and reactions of the English system, it seems tome that the assessment of compatibility or incompatibility is taken case by caseand as matter of fact through the comparison made by judges (never monocratic
and always of great experience) with the ‘values’ (of which the public order isonly one of many elements) ie those principles of collective and social interest
recognized by the communities: the sanctity of the person; the sanctity of property;
national and social safety; social welfare; morality of the day; respect of tradition;
the peaceful national and international coexistence; etc. Those values are not

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The Italian Law Journal[Special Issue‘codified’ but depend on social and historical changes.
I wonder if the English lesson is exportable at least in civil law systems. In
my opinion, also in the civil law systems (and in the Italian one in particular),
there are rooms for evaluating the tolerability of bleeding in order to ensure
systematic consistency and, at the same time, adaptation to the new historicaland social realities in accordance with the best quality of life for all associates.
Indeed we too can refer to the ‘general principles’ in our legal system – asexpressly stated by the Civil Code in Art 12 of the preliminary provisions – andwe can in addition, refer not only to the public order but also to the concept of‘good custom or morality’.
Very briefly I remember here that public order has been defined as ‘the setof fundamental juridical assets and of primary public interests on which isbased the orderly and civil cohabitation in the national community’ (Art 159,
decreto legislativo 31 March 1998 no 112) and is seen in a negative sense, ie as alimit to any behaviour in contrast with the rules of the State. While ‘good custom
and morality’, ie the set of principles and ethical-social values of a community,‘even more than public order and other elastic clauses of the legal
system, requires a continuous contact between norms and the multiform
variety of social life. So, far from having a unique, eternal and immutable
content, the “good custom and morality” can be filled with correct contents
only with reference to the historical-social-moral contingency of a community’.
In my opinion, it is precisely from the mixture of these three elements that
it is possible for the interpreter to deduct in a more objective way what are the‘values’ at the basis of society and of the legal system. Through them it is possible toassess whether and to what extent the alien rule bleeding the native normative
pattern is or not compatible and therefore acceptable.
Like all closing clauses, the triad public order + morality + general principles ofthe order has a rubber nature that is sufficiently elastic to adapt to novelties but
rigid enough to avoid alterations and contradictions.
I very well understand that even in these cases the assessment will always
be an evaluation entrusted to an interpreter, a judge, a lawyer, a politician...
with all the risks involved. However, I am confident that any system contains in
itself the antidote to arbitrariness.
After all, as I say to my students, the most important rule in law is the ‘Boskov’(famous Serbian coach of many famous football teams) rule: game is over (penaltyis) when the referee blows his whistle.
Ultimately, the most difficult but essential thing in law is to decide.

Anti-Discrimination Legislation and Work Placement
for Persons with Disabilities. A Comparison Between
Italy and Japan
Pierluigi Digennaro

Abstract
The essay provides a comparative overview of the laws concerning discriminationof disabled workers and the employment of persons with disabilities in Italy and Japan.
Both legal systems combine a quota-levy system with antidiscrimination dispositions.
Also, Japan recently embedded a human-rights approach including a prohibition on
workplace discrimination in order to comply with the UN Convention on the Rights of
Persons with Disabilities.
Notwithstanding these similarities, there exist certain differences concerning not
only the detailed provisions or procedures but also the general legal framework and theway in which international standards are arranged in the respective national systems.
The paper analyses the Italian and Japanese legal frameworks in the context of thegeneral outline of the subject and also aims to provide a uniform basis for the future
work of experts in the field.

I.

Introduction

The United Nations Convention on the Rights of Persons with Disabilities(UNCRPD) dates back to 2006.1 Since its adoption, the UNCRPD has triggered
the amendment of previous laws in the field of discrimination and employment
of disabled people in many countries with important changes occurring incountries with different legal traditions such as, for example, Italy, Japan or
New Zealand.
The UNCRP has also been ratified by the European Union (EU) and by eachof the member States most of which already had specific laws regulating at least
some of the issues that the UNCRPD takes into consideration while the EU itself
had already set directives against discrimination as one of its historical pillars.
The UNCRPD is a major step forward in the transition from the conceptionof disability as a natural condition of physical or psychological impairment to a
relational concept, resulting from the interaction between persons with impairments

PhD in Labour Law, University of Bari; Overseas Researcher under Postdoctoral Fellowshipof Japan Society for the Promotion of Science, Meiji University.
1 United Nations Convention on the Rights of Persons with Disabilities 2515 UNTS 3 (opened
to signature 13 December 2006, entered into force 3 May 2008).

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Anti-Discrimination Legislation40

and attitudinal and environmental barriers.
This new conception of disabilities has probably been the most difficult
directive to implement for national legislators because it affects the legal definitionof disabilities in each legal system. Indeed, those definitions commonly developedin continuity with those included in previous legislation that often dates back to
the First World War or even further back in time when disability was considered amatter of charity or assistance and, as such, as a financial burden on the State.
Scholars have identified two different policies in the field of employment
for disabled persons, namely the ‘equality of opportunity approach’ which isbased on the recognition of civil rights for disabled people considered as a politicalminority and the ‘employment quota approach’ which considers the disabled
person only as a welfare recipient. This distinction reflects the difference between
the social model and the medical model of disability with the second model
reinforcing the ‘separate treatment’ doctrine.2
The USA and Japan have long been considered as typical examples of those
two ends of the spectrum of employment protections for the disabled.
I argue that this description of the different models which scholars haveadopted is too categorical and is indeed difficult to reconcile with both theEuropean model and that of Japan which has been profoundly reformed byrecent amendments to the Act on Employment Promotion of Persons with
Disabilities (AEPPD) in 2013 inspired by the UNCRPD.
Indeed, on the one hand, one of the issues with a quota system is that it
commonly requires a clear-cut definition of disability in order to specify thetarget of the placement system explicitly, and this often results in the persistenceof forms of ‘certification’ of disability released by medical commissions orcommittees of experts.
As a result, also the idea of a disability based on a medical statement tends
to endure.
However, on the other hand, all the European countries that first introduced
the quota system after the First World War (for example Italy, France or Germany)
coupled it with antidiscrimination provisions at a later stage so that the former
is nowadays framed as a positive action aiming at boosting the participation of
disabled persons in society and the labor market.
In other words, the quota system is a useful tool to rebalance the lack ofopportunity that disabled people often have to face in the labor market, giving
them a real chance to gain a more equal position in the society.
Moreover, a proper assessment of any legal framework also depends on theway the reasonable accommodation duty has been embedded and on what its
function in it is. Indeed this duty plays a key role in the completion of the shift
from the medical to the social approach to disability.
2 Recently see, for example, K. Heyer, Rights Enabled (Ann Arbor: University of Michigan
Press, 2015), 24-28.

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This paper cannot analyze in depth all of these involved questions. However, it
can furnish a contribution to the debate by providing an overview of theJapanese and Italian legislation on the matter of discrimination and placementof the disabled at work as a basis for future consideration keeping in mind thegeneral outlines of the subject.
The comparison between Italy and Japan is of interest because the key
elements of the most recent amendments introduced in the latter country, suchas a broader definition of persons with disabilities under the law, the introductionof the prohibition of discrimination against persons with disabilities and theobligation to provide reasonable accommodation brought the Japan system muchcloser to a third group of mainly European countries which had already merged
the quota system with dispositions against discrimination.
The regulations of the two countries under scrutiny will be presented startingfrom the interpretation of the Constitutional provisions which enable the legislationon this subject. Some information about other dispositions more broadly related
to disabled persons will be furnished although the focus will be on the antidiscrimination law at the workplace as well as on the mechanism of employment
for disabled persons (the quota system).3
In the case of Japan, some clarifications related to the Japanese labor law
peculiarities will be underlined to explain better the rationale underpinning certain
provisions which might not be readily intelligible without such elucidations.
II. The Italian Legal Framework
The Italian Constitution is probably the most prominent example of ‘Social
Constitutionalism’ and therefore it views work as the cornerstone of humandevelopment and as the foundation of the Republic.
Art 3 para 1 of the Italian Constitution contains the solemn proclamation of
the equal social dignity of all the citizen and the principle of formal equality
before the law irrespective of any personal characteristic.4
This principle ‘has been applied by the Constitutional Court (…) as acomplex principle that presupposes an evaluation of different personal and social
conditions’, so that any law is considered reasonable before the Constitutional
Court if like cases are treated alike, and different cases are treated differently.5
3 Both the quota systems of Italy and Japan shall be labeled as quota-levy system. Typicallyin this case a quota is set and it is required ‘that covered employers who do not meet their
obligation pay a fine or levy which usually goes into a fund to support the employment of
disabled people’ (L.B. Waddington, ‘Reassessing the Employment of People with Disabilities in
Europe: from Quotas to Anti-Discrimination Laws’ 18(1) Comparative Labor Law Journal, 62(1996)).
4 ‘All citizens have equal social dignity and are equal before the law, without distinction ofsex, race, language, religion, political opinion, personal and social condition’.
5 See R. Del Punta, ‘What Has Equality to Do with Labour Law’ 18(2) The International of2018]

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42

Moreover para 2 of the same Art 3 places on the Republic the burden ofremoving‘obstacles of an economic and social nature, which constrain thefreedom and equality of all citizens, impede the full development of humanpersonality and the effective participation of all workers in the political,
economic and social development of the country’.
In this framework, all the labor legislation and the anti-discrimination law
are tools to implement Art 3 para 2 of the Italian Constitution and thus reachthe substantive equality.6
The protection against all forms of discrimination that target persons withdisabilities is ensured by two different legislative instruments, namely legge 1
March 2006 no 67, regarding measures for the legal protection of people withdisabilities who are victims of discrimination, and decreto legislativo 9 July
2003 no 216 which implemented Directive 2000/78 /EC on equal treatment in
employment and working conditions in the national legal system.7
Both of these regulatory instruments adopt the same concepts of direct andindirect discrimination as well as of harassment directly inspired by the European
Directive.
As is well known, in the European framework, direct discrimination occurs
when a person is treated less favorably than another is, has been or would betreated in a comparable situation on one of the protected grounds. Indirectdiscrimination, on the other hand, occurs where an apparently neutral provision,
criterion or practice would put persons who belong to specific groups in which
all the people share a particular characteristic at a particular disadvantage
compared with other persons.
The above mentioned legge no 67/2006 exclusively addresses people withdisabilities but has a wider scope compared to the decreto legislativo no216/2003 in terms of field of application. The decree is designed to provide
disabled persons with the full enjoyment of their civil, political, economic andComparative Labor Law and Industrial Relations, 197, 199 (2002).
6 The Italian Constitution directly deals with disability at Art 38 where the latter is considered
as an issue the welfare state has to cope with. In fact, under Art 38 ‘Every citizen unable to work
and without the necessary means of subsistence has a right to welfare support. Workers havethe right to be assured adequate means for their needs and necessities in the event of accident,
illness, disability, old age and involuntary unemployment. Disabled and handicapped persons
have the right to education and vocational training. The duties laid down in this article areprovided for by entities and institutions established or supported by the State. Private-sector
assistance may be freely provided’. For a correct interpretation of this article in conjunction
with Arts 2, 3 and 4 (right to work) of the Italian Constitution refer to P. Digennaro, ‘Right toWork and Placement of the Disabled in the Labour Market: The Italian Legal Framework’
Revista derecho social y empresa, 143, 149-151 Suplemento n.1 Abril (2015).
7 Council Directive 2000/78/EC of 27 November 2000 establishing a general framework
for equal treatment in employment and occupation [2000] OJ L303/16.

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social rights through the prohibition of any discrimination in any field or sphereof social life and relations. Conversely, decreto legislativo no 216/2003 has abroader range of recipients since it regulates equality and the prohibition of
discrimination against any individual on the grounds of religion, personal beliefs,
disability, age or sexual orientation. However, it targets discrimination exclusively
in the employment context from the hiring process and access to employment
until the termination of the working relationship and includes any event related
to it.8
A new article (Art 3-bis) has been added to the decreto legislativo no216/20039 in order to guarantee the compliance of the Italian legislation with
the European directive after the Court of Justice of the European Union (CJEU)
found Italy to have failed in fulfilling its obligation to ensure the correct and full
implementation of Art 5 of Council Directive 2000/78/EC.10
Therefore Art 3-bis decreto legislativo no 216/2003 introduced in the
Italian system the reasonable accommodation duty for public and private employers.
The provision refers directly to the definition of the reasonable accommodation
included in the UNCRPD rather than to the Directive and does no more than
implement the general principle without any further or more detailed regulations.
As a result, Art 3-bis decreto legislativo no 216/2003 provides an ample space
for a judge-made implementation law since Courts will need to design boundaries
and define the significance of the embedded principle in concrete form by meansof interpretation.
Alongside the anti-discrimination law, the system is still founded on the
obligation of employers to hire a quota11 of disabled workers and, in the event of
8 In order to have a general overview of the state of the implementation of anti-discrimination
law and directives in Italy refer to C. Favilli, ‘Report on Measures to Combat Discrimination(Directives 2000/43/EC and 2000/78/EC Country Report)’, 1 January 2014, available athttps://tinyurl.com/y8xabgyd (last visited 15 November 2018).
9 By means of Art 9, para 4 decreto legge 28 June 2013 no 73, converted into legge 9
August 2013 no 99.
10 Case C-312/11 European Commission v Italy, Judgement of 4 July 2013, available atwww.eur-lex.europa.eu.
11 The Constitutional legitimacy of the system of compulsory employment which evolved
after in the quota system was challenged already in 1960 in consideration of the assumed
restriction of the economic initiative and of the organization and dimensioning of companies
protected by Art 41 para 1 Constitution. Moreover, it was assumed that the costs of obligatory
employment of persons with disabilities should have been a burden of the State in accordancewith the provisions of Art 38 Constitution.
The Constitutional Court stated that the purpose of such kind of provisions are not toprovide beneficiaries with charitable maintenance but to conclude a real employment contract
which requires the performance of work and to offer disabled persons the way to still play arole according to their abilities. Those provisions are indeed necessary in order to remove the
obstacles to the actual participation of all workers in the economical and social development of
the country according to Art 3 Constitution and to fulfil the duty of solidarity entrenched in Art
2 Constitution (Corte Costituzionale 15 June 1960 no 38, and 11 July 1961 no 55). The Court
clarified also that the quota system does not affect the economic organization of companies in2018]

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44

non-compliance, on the corresponding pecuniary sanctions to be paid to the‘Regional Fund for the Employment of Disabled Persons’. Subsidies are given to
employers in order to favor the stable employment of the disabled and above allof those with severe disabilities.
Legge 12 March 1999 no 68 entitled Standards for the Right to Work of
Disabled People which replaced the previous law on compulsory employment,
namely legge 2 April 1968 no 482, led to a significant cultural and regulatory shift
in Italy. While the earlier law was essentially based on numerical job placement,
legge no 68/1999 introduced the concept of ‘targeted’ employment.
The starting point of this legislative scheme is the obligation placed by Art 3
on both public and private employers, to hire disabled workers in a variable
amount that depends on the total number of human resources of the company.
Thus, if the company employs more than fifty employees, the quota is seven percent; if it employs from thirty-six to fifty employees, the quota is two workers;
finally, if it has between fifteen and thirty-six employees, to hire one disabled
person is sufficient to meet the requirements.
Small businesses with fourteen or fewer employees have no obligation, butthey receive economic incentives when they hire voluntarily.
The procedure establishes that potential employees who aspire to a job
must enroll in appropriate lists held by the ‘services for targeting employment’.
In those offices, a file is opened for each person recording skills, capabilities, job
preference, the kind and degree of disability. Every year, private and public
employers will send to the public employment services a prospectus containing all
the information related to the fulfillment of the quota such as the total numberof the workforce employed, the number of disabled persons employed12 and job
positions and related tasks available to cover the quota if needed.
The idea is to facilitate a match between the effective demand for work andthe supply of labor by comparing the information, and at the same time tointroduce each disabled person not just to any job, but to an activity suitable forhis or her skills and professional qualifications.
According to the previous version of the law, once the employer submits
the request for the number of workers needed to meet the quota, the job center
would then arrange the placement of the person according to the list-rank.
After the last reform, due to the decreto legislativo 14 September 2015 no150, the process has changed in that the employer can instead select a group of
consideration of the modest imposition of small quotas compared to the total number of
employees.
The Constitutional Court continued to refer faithfully to the above-mentioned reasoning
also in the most recent rulings related to the quota system (order 23 December 1994 no 449
and order 21 March 1996 no 86). All the mentioned judgments are available on the official
website of the Court (https://www.cortecostituzionale.it/actionPronuncia.do).
12 A similar provision is included in the Art 43(7) of AEPPD, but the rationale behind theprovision of this law differs if compared with the Italian one as will be clear after the comparison.

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workers who have the required skills and want to adhere to the job offer fromthe list mentioned above.
The amendment was criticised by labor unions and associations of disabled
persons because it enlarges the discretion of the employer as it sets the possibility
to choose among workers as the basic option of the mechanism (while in theprevious version it was an exception). This can lead to a marginalization of workers
with more severe disabilities. Indeed there will be fewer chances for thosepeople to be selected and the new procedure could create breeding ground fordiscrimination among disabled candidates.
The fulfillment of the obligation related to the pre-set quota can also be
accomplished using a different tool which is available even to those employers
wholly excluded from the scope of Art 3 of legge no 68/1999. This mechanism
entails, on the one hand, a relationship between companies and Public
employment services which sign a framework agreement and, on the other
hand, a relationship between the employer and the disabled worker which sign
the employment contract and who can enjoy a personalized plan of placement.13
The employer benefits from the more favorable management of thecircumstances leading to compliance with the quota, planning the entry of disabledworkers in its productive system a few at a time without concern about possible
sanctions for non-compliance with the quota required by law.
Arts 12 and 12-bis legge no 68/1999 provide for different kinds of contracted
tools which can be activated under some conditions and only to cover the quota
partially.
There is not enough space here to describe the different features14 of each
instrument but what is important to underline is the general scheme which theyshare. The disabled worker is counted in the quota of the employer who activatedthe placement agreement even if the worker is placed in a ‘hosting’ workplace.
The ‘recipient’ can be a social cooperative, a social enterprise or in any case an
employer who is considered by the legislator to be more suitable for theemployment of disabled persons.
I will comment on these specific tools at the end of the next section
comparing them with a distinguishing legal device of the Japanese model.
III. The Japanese Legal Framework
Art 97 of the Japanese Constitution states that fundamental human rights
are ‘conferred upon this and future generations in trust, to be held for all time
inviolate’.
Moreover Art 14 Constitution adds that
13 Art 11 legge no 68/1999.
14 For a more detailed explanation refer to P. Digennaro, n 6 above, 159-164.

2018]

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46‘all the people are equal under the law and there shall be no discriminationin political economic or social relations because of race, creed, sex, social
status or family origin’.
The Japanese Courts have interpreted this provision over the years with theeffect of enlarging its scope.
Hence, for example, the term ‘social status’ means status gained by birth,
the term ‘nationality’ includes the concept of race, and the term ‘creed’ has been
intended as to include both political and religious beliefs.15
At the same time, it is important to underline how the principles containedin Art 14 Japanese Constitution have traditionally been interpreted when inconnection with the freedom of contract and hiring.
The prevailing academic view supported by a landmark decision of theSupreme Court16 held that the latter ‘provision does not tackle discriminatory
treatment before the formation of labor contracts (ie, at the recruitment andhiring stage)’17 but instead it has to be read in conjunction with Art 27 of theJapanese Constitution which imposes limitations on the employer only when
fixed by law and related to the working condition (so the conditions which apply
when an employment relationship already exists) or derived from the necessity toaccomplish the right to work.
For this reason, for example, the legislative policy (ie, in particular, thequota system) promoting the employment of a category of persons such as thedisabled person who finds more difficulties and barriers in finding jobs has
been considered as an exceptional restriction of the hiring freedom based on
Art 27, para 1 Japanese Constitution (right to work).
However, the most recent Japanese legislative policies show a trend toward
strengthening the limitation on hiring freedom, above all those based on civilrights principles, such as the prohibition of discriminations. Suitable examplesof the said trend are both the Equal Opportunity Law and the new amendments
to the AEPPD which will be discussed below.
The more this tendency grows, the more difficult it will be to maintain theposition that, with only some exceptions, the general rule based on theConstitution of Japan is the absolute freedom to choose the workforce. The
ongoing process could lead in the future to reverse the situation, that is to
15 T.A. Hanami et al, Labour Law in Japan (Alphen aan den Rijn: Kluwer Law International

BV, 2nd ed, 2015), 147.
16 Supreme Court, 12 December 1973, Mitsubishi Jushi v Takano, 27 Minshu 1536, where
the Court stated that ‘the Constitution’s (…) Arts 22 and 29 et seq guarantee, as basic civilrights, the right of a business to exercise its property rights, business freedom, and otherfreedoms with respect to its broad economic activities. That is why the owner of a business,having the freedom to conclude a contract linked to his or her economic activities, can as a
general rule hire any workers and employ them under any conditions for its own business (…)’.
17 K. Sugeno, Japanese Employment and Labor Law (Durham: Carolina Academic Press,
2002), 148.

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establish as the broad standard the existence of a general duty not to discriminate,
which can be limited by some exceptions (as it is the case in the European legal
framework).
As regards the ordinary law, prohibitions against discrimination are scatteredin various acts.
Art 3 of the Labor Standard Act (LSA)18 represents the most general provision
mirroring the Constitutional guarantee since it prohibits discrimination by theemployer in the workplace on the basis of nationality, creed or social status.
Moreover, Art 4 LSA prohibits discriminatory treatment because of sex
with respect to wages.19
In 2006 an important amendment to Art 7 of the Employment Opportunity
Law (EOL)20 introduced, for the first time in Japanese labor Law, the concept
of indirect discrimination.
There are two factors which limit the scope of this new instrument.
First of all, the EOL is a law explicitly targeting discrimination based on sex
only.
Moreover, even within its specific field, the law covers only some practices
specified in a decree of the Ministry of the Public Health and Labor which are
regulated as forbidden indirect discrimination provided that the employer cannot
demonstrate that there is a legitimate reason to take such measures.21
The Labor Policy Council Subcommittee on Disabled Employment22 which
was appointed to conduct studies at amending the (AEPPD)23 discussed whether
to introduce a provision also prohibiting the indirect discrimination of disabledworkers.
The final opinion was negative because the Subcommittee held that indirectdiscrimination is a vague concept and also that the cases not falling under directdiscrimination could be addressed by providing reasonable accommodation.
This implies that‘in other words, indirect discrimination is not considered to be prohibited
18 Act 7 April 1947 no 49. It states that ‘Employers shall not use the nationality, creed orsocial status of any workers as a basis for engaging in discriminatory treatment with respect towages, working hours or other working conditions’.
19 Art 4 LSA states that ‘Employers shall not use the fact that a worker is a woman as abasis for engaging in differential treatment in comparison to men with respect to wages’.
20 Act 1 July 1972 no 113 on Securing Equal Opportunity and Treatment between Men
and Women in Employment.
21 For an overview of the employment discrimination law in Japan see R. Sakuraba,‘Employment Discrimination Law in Japan: Human Rights or employment Policy?’, in R.
Blanpain et al eds, New Developments in Discrimination Law (Alphen aan den Rijn: Kluwer
Law International, 2008), 233.
22 The task of the Subcommittee was to express an opinion based on the content of threedifferent reports released by three different research groups set up inside the Ministry of
Health, Labour and Welfare to study the issue of possible revisions.
23 Law no 123 of 1960.

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in Japan. The AEPPD is construed as adopting the position of distinguishingdirect discrimination from indirect discrimination in terms of whether or
not there is an ‘intention to discriminate’, it prohibits direct discrimination
as discrimination in which there is an intention to discriminate’.24
The amendment of the AEPPD was a part of a broader policy pursued by
the Japanese legislators which was aimed at paving the way for the ratificationof the UNCRPD in 2013. Therefore this strategy also included the revision of
the Service and Support for Persons with Disabilities Act, the enactment of the
Act for Eliminating Discrimination against Persons with Disabilities (AEDPD)
and, as the first step in 2011, the revision of the Basic Act for Persons with
Disabilities (BAPD).
The latter law was conceived as an instrument of particular importance inorder to reflect the objective of the UNCRPD as it had been the gate for both a
new definition of ‘persons with disabilities’ able to mark a shift in favor of thesocial model, 25 and the concept of ‘reasonable accommodation’ which wasestablished in a domestic law in Japan for the first time. Moreover, a prohibitionof discrimination was included in Art 4 BAPD.
The AEDPD, in turn, is intended as a means to realize the provisions of the
BAPD. Therefore it classifies discriminations against persons with disabilities in
two categories: a) ‘unfair discrimination treatment’ which occurs in the case ofrefusing, restricting, or adding conditions to the provision of goods and service
simply due to someone’s disabilities without justifiable reason and b) a failure
to provide a reasonable accommodation when a disabled person asks for it aslong as providing reasonable accommodations does not imply an excessive burden.
While the prohibition against discrimination has a general scope, the duty
to provide for a reasonable accommodation is imposed only on national andlocal governments since private businesses have an obligation to make endeavors
only (Art 8).26
24 H. Tamako, ‘Reasonable Accommodation for Persons with disabilities in Japan’ 1 Japan
Labor Review, 21, 24 (2015). Compare with K. Tominaga, ‘Kaisei Shogaisha Koyo Sokushinhono
Shogaisha Sabetsu Kinshi to Goriteki Hairyo Teiko Gimu (Prohibition of Discrimination against
persons with disabilities and the obligation to provide reasonable accommodation in the Amended
Act on Employment Promotion etc of Persons with Disabilities)’ 8 Quarterly Jurist, 27, 29 (2014).
25 As far as the definition of disability is concerned Art 2(i) BAPD states that ‘Person witha disability refers to a person with a physical disability, a person with an intellectual disability, aperson with a mental disability (including developmental disabilities), and other persons withdisabilities affecting the functions of the body or mind (hereinafter referred to collectively as‘disabilities’), and who are in a state of facing substantial limitations in their continuous daily
life or social life because of a disability or a social barrier’. The subsequent letter (ii) specifies
that ‘‘Social barriers’ refers to items, institutions, practices, ideas, and other things in societythat stand as obstacles against persons with disabilities engaging in daily life or social life’.
26 A gradual and soft approach which combines a duty to make efforts (that is the socalled duty to ‘endeavour’) coupled with administrative guidance has been used often in social
policy in Japan and above all in the case of anti discrimination policy as it was, for example, inthe case of the equal employment policy concerning the elimination of sex discrimination. This

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Notwithstanding this, it is important to point out that Art 13 AEDPD refers
to the AEPPD all the competence in governing the measures to be taken by
public bodies and private enterprises in order to eliminate discriminatory
treatment against workers on the grounds of disability when they are in theposition of employers. Therefore, new provisions to prohibit discrimination at
the workplace, as well as a real duty to accommodate, were introduced in the
AEPPD which became, for this reason, the all-embracing law which regulates all
the aspects of employment and the right to work of disabled persons in Japan.
Effectively it is the AEPPD under Art 36 paras 2 and 3 which obliges employers
to provide a reasonable accommodation unless it entails a disproportionate
burden (so, in this case, it is not just a duty to endeavor).
Moreover Art 35 reinforces the prohibition against discriminatory treatment
in terms of ‘wages, the implementation of education and training, the utilizationof welfare facilities and other treatments’ while Art 34 specifies that with regard
to the recruitment and employment of workers, employers shall provide equal
opportunities for persons with and without disabilities. Therefore, the former
article is devoted to avoiding discrimination after hiring while the latter to therecruitment process. The scheme is the same utilized in the Equal Employment
Opportunity Act to avoid discrimination between men and women in employment.
For the reasons mentioned above related to the interpretation of the freedomof hiring under Japanese labor law, including in the Act an explicit provision inorder to specify that excluding a candidate because of his/her disability is framed
as discrimination, and is therefore prohibited, was necessary and of particularimportance.
Turning to the analysis of Chapter 3 of the AEPPD dedicated to theemployment promotion of disabled persons, the system is based on a quotalevy system.
Private companies, the bodies of State and local authorities are required to
employ a legally prescribed minimum percentage of persons with physicalintellectual or mental disabilities, the latter category having been included in
the mandatory hiring as a result of the last reform in 2013.
The quota for private businesses itself rose from one point one per centwhen the system was established in 196027 to two per cent in April 2013. From
April 2018 the quota increased to two point two per cent, and it has been
particular approach must be considered as ‘one of the most significant characteristics of thesocial policies in Japan’ based on the idea that it is more effective than a direct legal intervention. A
mandatory form of intervention is instead viewed as useful only in the case that the soft
approach failed or when ‘society has accepted new norms and direct legal intervention will nolonger cause serious confusion’ (see T. Araki, ‘The impact of fundamental social rights on
Japanese law’, in B. Hepple ed, Social and Labour Rights in a Global Context, Internationaland Comparative Perspectives (Cambridge: Cambridge University Press, 2002), 215, 234-235.
27 At the time the quota was not mandatory and was limited to persons with physicaldisabilities.

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determined that it will reach two point three per cent by the end of the fiscal
year 2020.28
Indeed, on the 30 May 2017, the Labor Policy Council approved the decision
to raise the quota to two point three per cent for the private sector employers,
two point six per cent for national and regional public bodies and specified
incorporate administrative agencies and two point five per cent for prefecturaland local boards of education starting from 1 April 2018 to the 31 March 2023.
Notwithstanding this, to avoid an excessive burden on enterprises, it was
decided to move gradually towards the final target by setting an intermediatestep consisting of the following provisional rates: two point two per cent for theprivate sector employers, two point five per cent for national and regional bodies
and specified incorporate administrative agencies and two point four per centfor boards of education. The transitional measure will be abolished by April
2021. As for the scope of application of the duty, the recipients were theemployers with fifty or more employees after the last reform in 2013. However,by means of the same decision related to the quota, also the numeric threshold
was downgraded to forty-five and half or more employees (with each part-time
employee counted as half) from April 2018 with the provision of one more
downgrade to fourty-three and half when the employment quota will be raised
to two point three per cent.
In 1976 a levy-grant scheme was introduced to encourage the employment
of disabled workers. In case of failure in fulfillment of the prescribed quota,
enterprises with over one hundred regular employees are required to pay a levyof fifty thousand yen per month for each person under the quota. Conversely,
employers that meet the quota receive adjustment subsidies amounting totwenty-seven thousand yen per month for each person over the quota or financial
incentives (twenty-one thousand yen per month for each person over the quota
for enterprises with one hundred or fewer employees).29
No penalty is charged to the government, local authorities and educationalboards.
Moreover, the law also provides various kinds of subsidies for employers
establishing or arranging working facilities or equipment for disabled workers
or taking measures to assist, support or facilitate the disabled workforce.
There are two more features of the Japanese system which it is essential tomention.
28 The specific timing will be discussed at a later stage by the Labor Policy Council which
is an advisory panel to the Minister of Health, Labor and Welfare. Official documents related tothe decisions mentioned here and onwards in the paper are available athttps://tinyurl.com/y73sonoe (last visited 15 November 2018).
29 About the levy-grant mechanism and in particular about the economic consequencesand effectiveness of the employment quota system refer to Y. Mori and N. Sakamoto, ‘Economic
consequences of employment quota system for disabled people: Evidence from a regression
discontinuity design in Japan’ 1 Journal of Japanese and International Economies, 1 (2018).

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Employers can establish ‘special subsidiaries’ to employ disabled workers.
The workforce employed in the subsidiary is counted as recruited by the parent
company for calculating its current employment rate under given requirements.
In this case, as well as with the case of the placement agreements provided
for by the Arts 12 and 12-bis legge no 68/99 mentioned in the previous paragraph,the legislator of Japan considered that the advantages are considerable on boththe sides. Indeed this tool should increase job opportunities for disabled persons
and the workers should be surrounded by an ideal work environment while theemployer is facilitated not only in fulfilling the quota and arranging the facilities,
but should also be able to count on an improvement of the disabled worker’s
productivity.
In this sense, these tools can be compared with regard to the rationale behindthem.
In both legal frameworks, those possibilities left to the employers have theeffect of separating or ‘segregating’ the disabled workers and the workplace madefor them from the rest of the workforce. The idea which emerges from these
instruments is hardly distinguishable from the one which operated for years inmany countries’ separate school systems for disabled pupils, ie the needs of thedisabled are considered different and better served in separate institutions.30
For this reason, these legal arrangments appear to conflict with the prohibition
against discrimination and above all against the concept of reasonableaccommodation, the philosophy behind which is the idea to make the generalenvironment barrier-free in order to make possible a mutual integration
between persons with and without disabilities.
Therefore, the removal of those legal institutions should be considered inorder to focus attention and resources on the reasonable accommodation duty
and the complete fulfillment of the quotas in the parent enterprises.
The last aspect to briefly present is the ‘Hello Work’ administrative agency,ie, the Japanese government’s Employment Service Center which manages services
for job-seekers, administers unemployment benefits and also, as regards the
topic of this paper, has a role in introducing careers for disabled workers.
In particular, when a ‘person with disabilities using welfare facilities (vocational
aid center, small-sized workplace, special-needs school, etc) wishes to work for
private companies, Hello Work’ can provide support for employment in cooperation
with the welfare facilities. In this case, a team provided by this government
30 Italy has long been at the forefront in the field of inclusive education, as the Republic
started to reform the school system to integrate the disabled students with the Legge 30 March
1971 no 118 but the complete abolition of separate schools for the disabled was the result of theLegge 4 August 1977 no 517. Conversely a move towards an inclusive approach to education in
Japan is a still ongoing recent development. The Basic Act for Persons with Disability introduced
the idea that children and students with disabilities should be able to receive their education
together with children and students without disabilities insofar as possible along with the duty
to accommodate, but the policy still needs to be fully implemented.

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agency supports the person from preparation for employment to the settlementof the workplace.
IV. Concluding Remarks
The comparison between the Italian and Japanese laws related to theemployment of persons with disabilities shows that both these countries adopted
a quota-levy system which shares a general structure. Both systems are basedon economic penalties and incentives albeit with differences regarding the quota
and the scope of the employer’s obligation to employ persons with disabilities.
These differences are understandable if one compares the scale of theenterprises in the countries under scrutiny. While the production systems inboth countries are classified as being dominated by small or medium-size
companies, the data shows that the majority of Italian enterprises are smaller
than Japanese firms and employ less than ten employees.31
Another relevant difference between the two models lies in the role of the
Public Employment Service. In the frame of the legge no 68/99, all the processof employment in Italy is carried out under the supervision of public bodies,from enrollment in the list of disabled job-seekers until the placement of theemployee, and the quota system is still crafted as an integral part of the Public
Employment Service and walfare state. In Japan instead, public employment
offices only control the fulfillment of the quota when the employer reports theemployment situation of persons with disabilities annually. It can also order theemployer to prepare a three-year plan to improve the situation and give
guidance for its implementation.
The ‘Hello Work’ Service is triggered by a personal request of the worker
and it is conceived as an additional help provided for disabled workers.
This said, at first glance one might consider that the Italian and the Japanesesystems are now very similar since the Japanese legislator adopted reforms
aiming at prohibiting discrimination.
The similarity specifically lies in the merging of the quota system with anantidiscrimination approach which is also a feature typical of many other
European countries.
The analysis would not be correct if it considers only this external data
related to the general scheme adopted on this issue because differences
31 According to a survey by Istituto Nazionale di Statistica (Italian National Institute of
Statistics; ISTAT), ‘Struttura e dimensione delle imprese’ 1 June 2011, available athttps://tinyurl.com/yd6robkm (last visited 15 November 2018) the Italian productive system
is characterized, on the whole, by the strong presence of micro enterprises: those with less thanten employees are almost four point three million, represent ninety-five per cent of the total
and occupy forty-seven per cent of the employees. Those enterprises have no obligation to hiredisabled workers as explained in the second section of this work and this factor hinders theefficacy of the quota system.

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emerge as soon as the interpretation of this pattern explores under thesurface.
The first differential factor has already been identified in the paragraphs
above. Indeed the European countries, including Italy, share the application of
the concept of indirect discrimination which does not coincide precisely withthe reasonable accommodation duty even if both of those instruments werecreated to address external sources of discrimination apart from any possibly
invidious intent of the employer.
Both the lack of a prohibition against indirect discrimination and thesignificant factor that under the long-term employment system in Japan, workers
are not hired for particular duties or tasks or for particular positions, but areassigned during their career to various types of duties and positions based on
the development of their job skills, could give room to a possible marginalizationof disabled workers during the employment relationship notwithstanding their
being formally accommodated. If such cases occur, the possibility of contrasting
unfair employer’s internal policy will probably rely on the doctrine of the abuseof rights which the Japanese Supreme Court has often used to protect employees.
The second difference is related to the definition of disability which, as
stated in the introduction, is one of the primary tools of the shift from the
medical approach to the social approach to disability.
In Italy, notwithstanding the fact that the definition contained in legge no68/1999 is still entrenched in the old paradigm,32 both because it preceded theinternational success of the social model and probably because of the perceived
necessity of a clear-cut definition, it applies only for the quota system.
Instead, when a case of possible discrimination is at stake, the national
courts are bound by a broad definition of disability with no need to ascertain
any status declared by a State body or medical commission.
Indeed, in that case, the national courts have to conform to the CJEU
interpretation of the Directives which in turn affirmed that the understandingof ‘disability’ set out in the UNCRPD binds the CJEU.33
This entails that the disability will refer, in the same words of the CJEU,‘to a limitation which results in particular from long-term physical,
mental or psychological impairments which in interaction with various
32 As the social model is based on criticism of automatic and systematic segregation of thedisabled and on the attempt to overcome the separate treatment doctrine, it must be said thatin Italy some efforts in this direction date back to the 1970s.
As for the school system, for example, see n 30 above.
Moreover, the quota system has been considered as a form of integration rather than as aform to provide charitable maintenance already in Corte costituzionale, 15 June 1960 no 38(see n 11 above).
33 Joined Cases C-335/11 and C-337/11, HK Danmark v Danskalmennyttigt Boligselskab,
Dansk Arbejdsgiverforening, Judgment of 11 April 2013 at para 32, available at www.eurlex.europa.eu.

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Anti-Discrimination Legislation

54

barriers may hinder the full and effective participation of the person
concerned in professional life on an equal basis with other workers’,in other words, the CJEU retained the same definition of disability under
Art 1 UNCRPD.
In the case of Japan, the Employment Promotion Act includes one definition
only of disability which is valid in all the aspects related to the application of thelaw and additionally this definition does not coincide with the one embedded in
Art 2 BAPD which was inspired by the social model of disability. According to
Art 2 AEPPD, disabled persons are defined as‘those who because of physical, intellectual, mental disabilities or other
impairments of physical or mental functions (…) are subject to a considerable
restriction in vocational life, or have a great difficulty in leading a vocational
life’
and insofar as they have a disability listed in an Annex of the law or an
intellectual disability specified by the Ministry order.34 Therefore the definitionof persons with disabilities in the AEPPD is the same as the one in the Act on
Welfare of Physical Disabilities. ‘As a result, whether a person is covered by the
Employment Promotion Act is defined by whether that person has a disability
passbook’.35
Those two factors, namely a definition itself which still seems grounded in avision of the disability as medical impairment and the link with the disability
passbook, could frustrate the reform and drastically reduce its impact as ashield against discrimination.

34 Art 2 AEPPD.
35 H. Nagano, ‘Recent Trends and Issues in Employment Policy on Persons with Disabilities’
5 Japan Labor Review, 5, 13 (2015).

Indirect Discrimination in Japanese Law:
A European Perspective
Michela Riminucci

Abstract
In Japan, the equality principle is embodied in Art 14, para 1, of the Constitution,according to which all citizens are equal under the law and cannot be discriminatedagainst on grounds of race, creed, sex, social status or family origin, in political, economic
or social relations. As a corollary, Art 3 and Art 4 of the Labor Standards Act establish
the principle of equal treatment. However, these principles are just a dead letter unless
the State commits to implement them. Therefore, the aims of this paper are twofold:
first, to clarify the content and application of anti-discrimination legislation in Japan,
taking into consideration the criticism by external observers; second, to evaluate theeffectiveness of the most recent reforms, including the one on indirect discrimination.

I.

Introduction

In the multi-level legal system of the European Union (EU), the principle ofequality has gradually reached a paramount importance under the influence ofthe constitutional traditions of its Member States. Moreover, constant efforts,
not only by national judges, but also by supranational and international courts
such as the Court of Justice of the European Union and the European Court of
Human Rights have contributed to the progressive definition of a heterogeneous
set of legal instruments serving the principle of equality – eg, the prohibition ofboth direct and indirect discrimination. Similarly, in Japan, a country that hashistorically based its own legal system on European models, the principle offormal equality is entrenched in the Constitution of 1946.1 Pursuant to Art 14,
para 1, all citizens are equal under the law and cannot be discriminated against
on grounds of race, creed, sex, social status or family origin, in political, economic
or social relations.2 Applied to the field of labor law, the principle of equalJunior Associate Professor of European Union Law and Comparative Law, Kōbe University.

1 This document was formally an amendment to the Constitution of the Empire of Japan(also known as Meiji Constitution) of 1889 (entered into force in 1890), although the text was
entirely rewritten. To date, the Shōwa Constitution has never been amended.
2 All Japanese legislation was consulted in its original language and its most recent version
on the portal of the Ministry of Internal Affairs and Communications of Japan, available at
http://www.e-gov.go.jp. All the translations are by the author, but the unofficial English
translations uploaded on the Japanese Law Translation website of the Ministry of Justice of2018]

Indirect Discrimination in Japanese Law

56treatment can perhaps be considered the main expression of the more generalprinciple of equality before the law. In Japan, the equal treatment in the workplaceis embodied in the Act 7 April 1947 no 49, also known as Labor Standards Act(LSA). According to Art 3 of the LSA, the employer shall not engage in differential
treatment in terms of wages, working hours, or other working conditions on
grounds of nationality, creed, or social status of the worker. Furthermore, theArt 4 of the LSA prohibits discriminating against women with respect to wages.
However, the above-mentioned principles are likely to remain a dead letter
if they lack a true commitment to implementation by the State and its institutions.
This issue is common to many legal systems. To overcome such difficulties, forinstance, the Art 3, para 2, of the Italian Constitution establishes a duty for theState to remove existing economic and social obstacles that prevent citizens fromdeveloping as human beings and becoming truly equal under the law as ideallyenvisaged by its drafters. This principle is known as substantive equality, and it
exists in Japan in the framework of seizonken (the right to a certain standard ofliving). Pursuant to Art 25 of the Constitution of Japan, in fact, all citizens havethe right to live a decent life and the State has to strive for the improvement andpromotion of social welfare, social security, and public health in all aspects oflife. In Italy, like in other European countries and in Japan, such constitutional
principles were codified after the Second World War.3 Later these were alsotransposed into ordinary laws. The Japanese LSA is a clear example of this.
Despite this formal legal recognition, the resulting framework both in Italy andin Japan often suffers from a lack of coordination between the various sourcesof law, with the consequence that the legal remedies put in place are not always
effective. One of the most productive and controversial developments of theequality principle in labor legislation has been in the area of equal opportunity
laws, but there is still much room for improvement, as many observers have beenstressing for years that competitive advantages would derive from more effective
implementation.4
The aim of this paper is twofold: first, it seeks to clarify the content ofJapanese anti-discrimination legislation stemming from the constitutional principleof equality. To limit the enquiry, I will chiefly focus on the laws against
discrimination on grounds of sex together with the interpretation of such norms
operated by Japanese judges. A more comprehensive view – eg on the so-called
Japan, available at http://www.japaneselawtranslation.go.jp, have been used as a reference
whenever possible.
3 The current Constitution of Italy, as well, was drafted and entered into force after theSecond World War (in 1947 and 1948, respectively). The Kingdom of Italy had a different
fundamental law called Statuto Albertino that entered into force in 1848 and included theprinciple of equality in Art 24, but see section IV below on the weakness of pre-war constitutions.
4 International Monetary Fund, IMF Country Report no 16/223 (Washington, DC:
International Monetary Fund, 2016), 25-39; Id, IMF Country Report no 16/268 (Washington,
DC: International Monetary Fund, 2016), 7.

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Japanese traditional employment system – will be adopted whenever necessary.
The paper further compares the Japanese legislation on such issues with similarnorms in Italy and the EU. Legally, Japan shares many similarities with some
European countries, and, therefore, it is interesting and fruitful to compare thedifferent approaches to implementing the equality principle and their results.
The second aim of the paper is to evaluate the effectiveness of the above-mentioned
anti-discrimination legislation in Japan in terms of achievement of a fullyfledged equality of opportunity. In particular, I will discuss some of the issues
pointed out in the 2016 concluding observations on Japan by the Committee on
the Elimination of All Forms of Discrimination against Women (CEDAWCommittee) of the United Nations.5 Obviously, this paper cannot completely
ignore the cultural peculiarities of Japan, but an approach that is more centeredon the efficiency of the institutional framework rather than alleged culturaldifferences will be preferred.
II. Challenges in Approaching Japanese Law
For geographical and linguistic reasons, Japan is still perceived to be legallyand culturally distant and inaccessible from Europe. Japanese scholars, however,beg to differ, since its legal system shares many similarities with those of some
European countries, such as Germany, France, and Italy. One of the maindifficulties that non-Japanese speaking scholars face in approaching Japanese
law is that the majority of studies written in foreign languages are biased by aspecific view, eg when the observer is wearing the glasses of the common law
family, which includes the United States of America, the United Kingdom,
Australia and others.6 What happens is therefore that the criticism is directed towhat is different, but not necessarily detrimental nor uncommon in other legal
systems. Apart from the fact that the traditional differences between common
law and civil law systems have been gradually challenged,7 in recent years, asmall group of European scholars, including some Japanologists, have started
5 UN Committee on the Elimination of Discrimination against Women, Concluding
Observations on the Combined Seventh and Eighth Periodic Reports of Japan (New York: UN
Committee on the Elimination of Discrimination against Women, 2016), 11-12.
6 G.F. Colombo, ‘Japan as a Victim of Comparative Law’ 22 Michigan State International
Law Review, 731-753 (2013).
7 Many new taxonomies have been proposed over time, eg one that distinguishes legal
systems on the basis of which pattern of law (professional law, political law, traditional law)prevails in a given country, see U. Mattei, ‘Three Patterns of Law: Taxonomy and Change in theWorld’s Legal Systems’ 45 The American Jounal of Comparative Law, 5-44 (1997). On thebright side, there was a try to overcome Western-centrism. However, traditional views remained
strong in the case of Japan, which is usually considered a system where cultural aspects prevailover the law, as seen in R. David and C. Jauffret-Spinosi, Les grands systèmes de droit contemporains(Paris: Dalloz, 2002), 433. Yet, in the end, no classification will ever come close to true objectivity
unless it is based on criteria that can be measured exactly in the same way by any person.

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Indirect Discrimination in Japanese Law

58

to study Japan also from the point of view of the law, which is outside thetraditional areas of Japanese studies – art, history, international relations,
literature, and religion. The main goal of these approaches is to attempt to freeJapanese law from the bias that for many years favoured culture and tradition
over law.8 The same approach will be adopted in this paper.
III. Terminology
Before moving on to the analysis of the existing legal framework, a few
preliminary remarks on some terms used in this paper are necessary, in order
to introduce the reader to a language that is, in fact, quite distant from European
ones. Perhaps the most important issue to discuss here is whether the conceptof equality existed in Japan, with a meaning that could be considered close to
the current usage, before the Meiji Restoration of 1868 and the gradualintroduction of European legal concepts. In the modern and contemporary
European tradition, the principle of equality derives from the French Revolution
and the Declaration of the Rights of Man and of the Citizen of 1789.9 This isprobably the most well-known legacy of the Enlightment in its attempt to stepaway from the inequalities of the Middle Ages, and its importance nowadays is
widely recognized, especially from the point of view of human rights.10, 11 In thecase of Japan, one may wonder if the word byōdō (equality) has the same
meaning than in the Western world. This question is even more compelling in
the light of the need expressed during the Meiji period12 to redefine existingwords13 to adapt them to foreign concepts newly transplanted after the end of
the sakoku14 in the second half of the 19th century.
In the Nippo Jisho of 1603,15 one of the most ancient dictionaries between
8 D. Vanoverbeke et al, The Changing Role of Law in Japan: Empirical Studies in Culture,

Society and Policy Making (Cheltenham and Northampton: Edward Elgar Publishing, 2014),
1-10.
9 Especially Art 1 of the Declaration, according to which people are born and remain freeand equal in their rights. Text in French consulted on the portal of the French Government,
available at https://www.legifrance.gouv.fr.
10 M.R. Ishay, The History of Human Rights: From Ancient Times to the Globalization
Era (Berkeley, Los Angeles, London: University of California Press, 2008), 7-9.
11 Although earlier notions of equality in terms of economic and social justice did exist.
Ibid 35-40.
12 Ibid 1868-1912.
13 Perhaps the two most notorious examples in the legal field are jiyū (freedom) and kenri(right). See G. Ajani et al, ‘Diritto dell’Asia orientale’, in R. Sacco ed, Trattato di diritto comparato(Torino: Utet Giuridica, 2007), 24-43.
14 Two centuries of almost complete isolation during which relations with foreign countries
were limited.
15 The anastatic copy published by Iwanami Shoten in 1960 was consulted, but the best
version is probably the color edition by Bensei Publishing of 2013. A different Bensei edition is
also on Google Books, available at https://tinyurl.com/y9nxkj4g (last visited 15 November 2018).

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the Japanese and Portuguese languages, the term appears as biŏdô followed by
the definition in Japanese tairacani fitoxi (equally alike).16 This was translated
into Portuguese as ‘equality of things that are on the same level’.17 In order tobetter understand this point, it is important to remember that the noun byōdō
is of Chinese origin and it is written in both languages with two characters thatmean ‘flat’ and ‘similar’. This etymology, therefore, suggests the idea of a seriesof things having the same length. Curiously, the kanji18 of dō in ancient China
represented the bamboo tablets used in public offices, including courts, forwriting. Even more interesting is the additional meaning of ‘equality and justice’,19
which appears in the sentence biŏdôni monouo vosamuru,20 translated as ‘togovern with equality and justice’.21 Therefore, the concept of equality not only
already existed at least from the 16th century, but it seems that it already containeda reference at least to formal equality intended as a way of governing that wascharacterized as just because it treated all people in the same way. In the evenmore ancient Dictionarium Latino Lusitanicum ac Iaponicum of 159522 the term
appears under æquabilis as biŏdônaru coto and under æqualiter as biŏdôni, so
it seems that the Japanese term was associated to æqualitas (equality). The factthat a similar concept existed, however, does not mean that is was applied andinterpreted as we would do today. Yet, it nevertheless represents a promising
starting point for a more thorough understanding of the principle of equality,
considering that the development of fundamental rights and human rights in
Europe is often linked to earlier philosophical and religious ideas that wherethen refined by the Enlightenment movement.23
IV. Constitutional Principles
As previously explained in the introduction, this paper analyzes the principleof equality as conceived in Japan and its application from the Constitution to
16 Which can be romanized according to modern rules (modified Hepburn system) as
tairaka ni hitoshii.
17 Igualdade de cousas que estão prainas. Rough translation.
18 Sinograph (character of Chinese origin) as used in written Japanese.
19 Equdade & iustiça. Rough translation.
20 In modern Japanese, byōdō ni mono wo osameru.
21 Gouernar com igualdade, & iustiça. Rough translation.
22 Available at https://tinyurl.com/ycmgtt78 (last visited 15 November 2018).
23 It is also worth remembering that byōdō is a Buddhist term (in Sanskrit, sama) thatoriginally signified calmness of the heart. It also appears in the well-known Lotus Sūtra withthe meaning of universally fair, with reference to Buddhist teachings, since they hold for all
living things. In the 8th century the meaning was expanded to include the capacity to take onother people’s sins and pain, closely resembling the Christian idea of ‘suffering surrogate’(daijuku, in Japanese), as Jesus Christ who suffered in order to save humanity. See H. Nakamura
et al, Iwanami bukkyō jiten (Iwanami Dictionary of Buddhism) (Tōkyō: Iwanami Shoten, 2nded, 2002), 851; S. Mochizuki, Bukkyō daijiten (Great Dictionary of Buddhism) (Tōkyō: Bukkyō
Daijiten Hakkōjo, 1936), V, 4358-4359.

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60labor legislation. While the concept of equality was present in pre-Meiji Japaneseculture, some scholars have suggested that the Japanese version of this principle
had different connotations from its European counterpart.24 The paper, therefore,
analyzes this alleged distinction from the point of view of the equality principle– which in truth is designed in different ways even within the borders of theEU.25 I will focus only on the developments that followed the Second World
War, although a wider study on the concept of equality as found, for example, inJapanese philosophies and religions could offer deeper insights. In particular, I
will limit my analysis to what happened after the Shōwa Constitution, which
was promulgated on 3 November 1946, and entered into force on 3 May 1947.
This legal text, in fact, represents a stepping-stone in an extremely complex
operation aimed at moving away from the dark years of Japanese imperial fascism.
In the context of the post World War II Japanese Constitution, the principle ofequality was given a prominent role. The idea that all citizens are equal under
the law is in fact a necessary premise for the establishment a democratic state,and, surely, at the time of the promulgation of the Shōwa Constitution, it had
the potential to renew the image of the country in the international arena. The
previous Japanese Meiji Constitution of 1889 was a weak fundamental law thatneeded to be drastically revised. Altough formally containing a bill of rights
granted to the subjects of the Tennō,26 the Meiji Constitution was characterized
by an extensive use of clauses that made it possible to limit such rights whenever
the executive deemed it necessary. In the past, and sometimes even nowadays,
the Shōwa Constitution has often been described as a mere imposition by theSupreme Commander for the Allied Powers (SCAP) Douglas MacArthur andhis staff that controlled Japan right after the Second World War. It is, however,clear from the documentation of its birth27 that the contributions by Japanesepoliticians were many. With regard to Art 14 (equality principle), the SCAP
seemed to have a very specific interest in the abolition of the feudal system andeverything that was connected to it, as stated in MacArthur’s three points.28
Therefore, the initial aim of the Constitution’s founders was more to dismantle
the previous balance of power, rather than guaranteeing equality among citizens.
24 T. Suami, ‘Rule of Law and Human Rights in the Context of the EU–Japan Relationship:

Are Both the EU and Japan Really Sharing the Same Values?’, in D. Vanoverbeke et al eds, The
Changing Role of Law in Japan: Empirical Studies in Culture, Society and Policy Making(Cheltenham and Northampton: Edwar Elgar Publishing, 2014).
25 European Commission, A Comparative Analysis of Non-discrimination Law in Europe(Luxembourg: Publications Office of the European Union, 2017).
26 Usually translated as emperor, although the modern definition of empire usually includes
the idea of a rule extending to overseas territories or a group of countries, which is not the caseanymore for Japan (although the term might be justified from a historical perspective). Nowadays,
it would probably be more appropriate to simply use the term king, since Japan is aconstitutional monarchy.
27 Available at https://tinyurl.com/4pfk7 (last visited 15 November 2018).
28 Available at https://tinyurl.com/y6wq9jwv (last visited 15 November 2018).

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For this reason, the principle of equality contained in the Constitution is still
applied mostly to vertical relations between the State and citizens, and can beapplied to horizontal or citizen-to-citizen relations only by means of interpretation.
With respect to Art 25 (the right to a certain standard of living), the influence of
Art 151 of the Weimar Constitution of 1919, the same found in other welfare
states such as Italy and France, is undeniable. It seems that the Japanesepoliticians Morito Tatsuo and Suzuki Yoshio29 particularly supported the Weimarmodel on the occasion of the constitutional amendment.30 Therefore, it seems
that, in this case, the Japanese view prevailed over the SCAP’s.
In assessing the importance of Art 14 of the Shōwa Constitution in terms ofequal opportunity law, a good starting point could well be the research done in
the eighties by Frank K. Upham. Although much has changed since then, Upham
tried to understand the connection between the law and social change. In
particular, he identified a group of cases decided by Japanese courts that might
have affected the Act 1 July 1972 no 113, also known as the Equal Employment
Opportunity Act (EEOA). In this regard, it must be noted that, as highlighted byUpham himself,31 many observers considered the EEOA the result of internationalpressure on Japan connected to the signature (1980) and ratification (1985) of
the United Nations Convention on the Elimination of All Forms of Discrimination
Against Women (CEDAW). In reality, however, it could be described more as aprocess, albeit one involving an external stimulus, that took root in the fertile
ground of an on-going jurisprudential reflection that will be summarized in thenext section.
V. Historical Overview
Upham starts by reminding us that the contribution of women to thedevelopment of Japan up until the end of the Second World War had been
fundamental, especially in agriculture and manufacturing. The situation changed
after the war. Until the 1960s, women had to leave the labor market when
getting married, usually around twenty-five years of age, and were not expected
to return to work later in their lives. From the 1980s, however, women started
re-entering the labor market, around thirty-five years of age, after their children
gained some independence. The reasons for this were many: a higher level of
education, a smaller number of children, longer life expectancy, and a decline inrural population. To these factors, one may add the economic crisis, which
29 The given name follows the family name, in accordance with the Japanese use.
30 H. Takahashi, ‘Kenpō gikai ni okeru Weimar Model: seizonken kitei no sōnyū’ (The Weimarmodel in the constitutional debate: the addition of a menschenwürdiges Dasein article) 37 Shakairōdō kenkyū (Research on society and labor), 1-48 (1990).
31 F.K. Upham, Law and Social Change in Postwar Japan (Cambridge and London: Harvard
University Press, 1987), 151.

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62definitely compelled the need for more money since one salary was not enoughanymore. However, women were relegated to low-level jobs, with lower salaries
and less employment protection. In this context, women were almost exclusively
part-timers and temporary workers, whereas full-time and undetermined-timejobs were reserved for men. Nowadays, inequality in employment persists inJapan as well as in many other countries,32 and the sub-group of atypical
workers is much larger because it includes around one third of the total numberof workers – mostly women, young and older people, and non-Japanese.33 As
summarized by Upham, in the past, Japanese women were excluded from thelabor market, and especially from managerial positions for three main reasons:the traditional idea of family;34 the fear that their inclusion would increase theunemployment rate of men; and the belief that men would become less devoted
to their jobs, without the support of their wives at home.
Currently, the above-mentioned justifications are considered old-fashioned,
to say the least, and history has proved them wrong, since no correlation has
been found between the rate of working women and the unemployment rate ofmen, or the devotion of men to their jobs. However, considerations like theseused to be quite common also in Europe, and such inflexible thinking still
lingers on in certain social groups, although they tend to be more hidden thanin the past, since they are perceived to be somewhat backward. Everythingchanged in a very short span of time, and in Japan, a series of cases opened thedoor to the EEOA and the recognition of the discriminatory nature of various
practices that had been widely accepted in companies up until the 1960s. A firstgroup of judgements scrutinized blatant and direct discriminations in term ofsalaries, pensions and staff reduction, whereas a second group of decisions,starting from the 1970s, focused on more indirect discrimination. As explained
above, the Constitution already contained a specific prohibition of discrimination,
but involved an action of the State – apart from being subject to an evaluationof reasonableness – and therefore could not be applied sic et simpliciter tohorizontal relations, ie cases of citizens discriminating against other citizens in
the workplace.35 Until the EEOA, the only protection in the latter situation was
the already mentioned Art 4 of the LSA, which still prohibits differential treatment

32 C. Olivetti and B. Petrongolo, ‘Unequal Pay or Unequal Employment? A Cross-Country
Analysis of Gender Gaps’ 26 Journal of Labour Economics, 621-654 (2008).
33 Unless otherwise specified, all statistical data is from the Statistics Bureau of the
Ministry of Internal Affairs and Communications of Japan, available at http://www.stat.go.jp.
34 As pointed out at the beginning of this section however, being forced to stay at home
was actually not the norm or tradition in Japan before the war, since women used to work as
much as men especially in agriculture and manufacturing.
35 It must be noted that this approach is not peculiar to Japan. On the contrary, it seems
to be perfectly in line with European tradition. As briefly outlined in section III, the equality
principle was established to protect citizens from abuses by public authorities that were common
practice under the ancien régime.

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in very limited cases – on grounds of sex and with regard to wages –,36 and Art
3, which covers discrimination on grounds of nationality, creed or social status.
Therefore, judges had to refer to other principles, such as Art 24 of the Constitution
on individual dignity and freedom of marriage, Arts 1 and 2 of the Japanese
Civil Code against the abuse of rights and in favor of the equality of sexes
respectively, and Art 90 of the Japanese Civil Code on the nullity of acts against
public order and good morals.37
Single cases will not be analyzed here.38 It is more useful, for the aims ofthis paper, to proceed directly towards evaluating the overall impact andoutstanding issues that still remained in the 1980s. Regarding the impact, oneof the points that Upham made is that litigation supported the creation of apolitical consensus39 that functioned as a prelude to the EEOA and its amendments.
It is undeniable that Japanese companies have gradually abandoned somecommon practices that Japanese judges have deemed in violation of the law,and the Ministry of Labor, nowadays Ministry of Health, Labor and Welfare(MHLW), has endorsed the case law produced by courts in this regard byamending the EEOA. At the same time, however, the Government did notchallenge in an active and effective way the more ambiguous discriminatory
practices that came about after the initial series of cases. Moreover, the lack ofcompelling legal remedies40 and the fact that the prohibition of discrimination
was not extended to all aspects of employment, including promotions andhiring, remained as outstanding issues. Obviously, differentiating workers according
to categories is not wrong per se, since it might help preserve a company in timeof crisis, during which temporary and part-time workers could be dismissed ina relatively easy way. However, if such a buffer becomes so common thatapproximately one third of the current workers are atypical, it might be a signthat there is something wrong with the system. Regarding this last point, fromthe employer’s point of view, it might well be that the protection they have toensure to full-time and undetermined-time positions is too much of an onerous
burden. If we recall John Maynard Keynes, who wrote in the 1930s that heimagined a future of three hours of work per day for a total of fifteen hours per
36 Other working conditions were excluded because in other situations discriminatory

treatment was in fact allowed in order to favor women, at least according to the legislator.
37 Notions of public order and good morals are often used, also in European legal systems,
as flexibility clauses that can be updated over time according to the interpretations given by judges.
38 For a more detailed overview of what is summarized in this section, see F.K. Upham, n
31 above, 129-144.
39 ibid 156.
40 In case of unlawful discrimination, the plaintiff could only hope for a limited monetarycompensation for damages, but not for the nullification of the discriminatory act. In companies, it
is quite common to calculate the costs of a possible lawsuit and compare them to how muchmoney can be saved thanks to an unlawful practice. If the lawsuit costs less that the benefits
derived from the unlawful practice, the management might prefer the latter. This kind of
behaviour is known in Law & Economics as efficient breach.

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Indirect Discrimination in Japanese Law

64week,41 the solution perhaps will lie in a redefinition of what work is supposed
to be, and on the importance of free time.
VI. Current Situation
In the previous section, the origins of the EEOA and the problems thatemerged up to the 1980s were quickly summarized. The situation, however, has
obviously changed in the years that followed. According to some scholars, what
is happening nowadays can be described as a progressive switch from an
employment policy approach to a human rights approach that is much moresimilar to the one adopted in Europe. 42 The EEOA, in its first significant
amendment entered into force in 1986, collected the outcomes of the abovementioned political consensus that had slowly crystallized over the years. Despite
its many initial flaws, the law has been refined to protect men as well as women,
and to cover other stages in the lives of workers, such as recruiting, promotions
and training, at least in theory. Moreover, in case of unlawful discrimination,
the worker can now be granted monetary damages as well as the annulment of
the act in violation of the law. 43 From the 1990s, however, the CEDAWCommittee expressed perplexities towards the so-called traditional employment
system. In particular, according to the Committee, it seemed that Japanese women
were subject to indirect discrimination resulting from the separate personnel
management track system44 widely adopted by private companies. Therefore,
the Japanese Government was urged to include a prohibition of indirectdiscrimination in legislation.45 It is undeniable that effectively prohibiting indirectdiscrimination could be a way to solve some of the above-mentioned issues
affecting Japanese female workers, but it took a long time and a great deal of
discussion before Japan finally introduced some sort of protection by amending
the EEOA in 2006. Moreover, as highlighted by other scholars,46 the provision
41 J.M. Keynes, ‘Economic Possibilities for our Grandchildren’, in J.M. Keynes ed, Essays
in Persuasion (London: Macmillan, 1931), 358-373.
42 R. Sakuraba, ‘Employment Discrimination Law in Japan: Human Rights or Employment
Policy?’, in R. Blanpain et al eds, New Developments in Employment Discrimination Law (Alphen
aan den Rijn: Kluwer Law International, 2008), 181-200.
43 Although a certain margin of discretion by employers remains, in accordance with theirfundamental right to do business enshrined in Art 22 of the Constitution.
44 According to this management practice, employees could be hired under two different
career tracks: one for workers that were destined to menial jobs and another one for workers
who could actually climb the career ladder until management positions. However, in order toaccess the latter, the worker had to accept a series of conditions, including transfers within
Japan and abroad, which were sometimes difficult to meet for women who have additionalfamily responsibilities.
45 UN Committee on the Elimination of Discrimination against Women, Consideration of
the Reports Submitted by States Parties under Article 18 of the Convention (New York: UN
Committee on the Elimination of Discrimination against Women, 1994), para 598.
46 M. Asakura, Koyō sabetsu kinshi hōsei no tenbō (A new prospect of anti-discrimination

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failed to become a true instrument for social change because of the reasons thatwill be summarized in the next section.
VII. Indirect Discrimination
The concept of indirect discrimination, also known as disparate impact,
firstly appeared in the United States Supreme Court decision Griggs v DukePower Co of 1971,47 where it was applied to discrimination on grounds of race.
The Unites States Supreme Court described the issue with an unusual reference
to the fable ‘The fox and the stork’ by Aesop. According to the fable, a fox
generously offered some milk to a stork, but it was on a plate that was actually
too wide and shallow for the stork to be able to drink. In the actual case, theemployer listed high school completion among the requirements, thus excluding
the majority of non-white applicants, although it was not necessary for the job.
However, as highlighted by the Court, ‘tests or criteria for employment or
promotion may not provide equality of opportunity merely in the sense of thefabled offer of milk to the stork’ and the ‘vessel in which the milk is proffered’
must be accessible to all. The relevant law48 had therefore to be interpreted asprohibiting ‘not only overt discrimination, but also practices that are fair in form,
but discriminatory in operation’. Consequently, the idea of indirect discrimination
focuses on the negative impact on a certain group of workers. In order tounderstand how the mechanism works, it might be useful to refer to the relevant
legislation applied in the EU.
With relation to discrimination on grounds of sex, the relevant EU Directive49
defines indirect discrimination as a situation‘where an apparently neutral provision, criterion or practice would put
persons of one sex at a particular disadvantage compared with persons of
the other sex, unless that provision, criterion or practice is objectively justified
by a legitimate aim, and the means of achieving that aim are appropriate
and necessary’.
This kind of discrimination is prohibited in relation to access to employment
and vocational training, working conditions including pay, and other matters
mentioned in the Directive itself. Therefore, three elements must be present at
the same time: (a) an apparently neutral rule; (b) a protected group that is affectedby such apparently neutral rule in a more negative way; (c) a comparator, ie a
law in employment) (Tōkyō: Yūhikaku, 2016), 61.
47 401 US 424 (1971).
48 Title VII of the Civil Rights Act of 1964.
49 European Parliament and Council Directive 2006/54/EC of 5 July 2006 on theimplementation of the principle of equal opportunities and equal treatment of men and womenin matters of employment and occupation (recast) [2006] OJ L204/23.

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Indirect Discrimination in Japanese Law

66

person of the other sex that can be used as term of comparison in order toassess the negative impact on the protected group by the apparently neutral
rule.50 Moreover, there is a possibility for lawful differential treatment in case ofobjective justification. As it will be clarified in the next paragraph, Japan adopted asimilar approach, but decided to limit the prohibition of indirect discrimination
to a very small number of cases.
Following the concluding observations of the CEDAW Committee of 1994
and, especially, of 2003,51 a first non-binding definition of indirect discrimination
was released in a policy research report by the MHLW in 2004.52 According tothis, indirect discrimination happens when an apparently neutral provision,
criterion or practice is unfavourably affecting, to a considerable degree, themembers of one sex in comparison to the other, and such provision is notreasonable or justifiable, for instance, because it has no connection with the job.
Moreover, seven examples of indirect discrimination were selected by the MHLW
research group. Two years later, the EEOA was amended to include indirectdiscrimination in Art 7, but the limitations were many. First of all, the prohibition
was applicable only to situations mentioned in Art 553 and Art 654 of the EEOA.
In addition, only three of the seven cases mentioned in the policy research reportwere listed:55 (a) height, weight or physical strength requirements at the time ofrecruitment or employment; (b) worker’s availability for relocation at the timeof recruitment, employment, promotion or job change; (c) worker’s experienceof relocation at the time of promotion. It seems that the selection of the threemeasures was based on consensus among the representatives of labor andmanagement, but not on political or legal considerations.56 Finally, it is always
possible for employers to prove that there is a ‘reasonable justification’57 thatmakes the differential treatment lawful.
To sum up, the prohibition of indirect discrimination was added to the
EEOA in 2006, although the Japanese term for indirect discrimination58 does
50 European Union Agency for Fundamental Rights, Handbook on European Nondiscrimination Law (Luxembourg: Publications Office of the European Union, 2011), 29-31.
51 UN Committee on the Elimination of Discrimination against Women, Consideration of
the Reports Submitted by States Parties under Article 18 of the Convention (New York: UN
Committee on the Elimination of Discrimination against Women, 2003), para 358.
52 Ministry of Health, Labor and Welfare, ‘Danjo koyō kikai kintō seisaku kenkyūkai
hōkokusho’ (Report of the research group on policies for equal opportunity between men andwomen in employment), available at https://tinyurl.com/yap649y4 (last visited 15 November2018).
53 Recruitment and employment.
54 Assignment, promotion, demotion, training, certain fringe benefits, change in job or
employment type, retirement, dismissal, and renewal of the labor contract.
55 Art 2 of Ordinance no 2 of 27 January 1986, as amended. See also the MHLW Public
Notice no 614 of 2006 for the guidelines.
56 M. Asakura, n 46 above, 72 (fn 12).
57 In Japanese, gōriteki na riyū.
58 In Japanese, kansetsu sabetsu.

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not appear in the law itself, since the title of Art 7 is simply ‘Measures on thebasis of conditions other than sex’. However, its many limitations have reduced
the potential of the provision in terms of raising awareness towards certain
situations that are nowadays considered legitimate, but are de facto hindering
the possibility of certain groups of workers, including women, but also young
and older people, or non-Japanese, to have access to the best opportunities in
the labor market. Of course, the MHLW can always update its list of unlawful
practices in the future, and Japanese courts can work on developing a moregeneral prohibition of indirect discrimination, which over time might be codified
in national legislation. However, this process that has struggled over many years
has been further slowed and, as mentioned above, the reform has missed theopportunity to really promote social change. On the bright side, it must be notedthat a legislative step was taken and it raised some awareness by generating public
discussion. Moreover, a certain degree of flexibility was ensured, since updatinga ministerial ordinance requires less effort than a law, and reference to theconcept of ‘reasonableness’ allows judges to balance decisions between businessfreedom and workers’ rights. Once again, the role played by the judiciary willprobably be fundamental.
VIII.Conclusions
In order to conclude this short overview on indirect discrimination in
Japanese labor law, some final, but certainly not definitive, considerations will
be drawn. A long time has passed since the entry into force of the Shōwa
Constitution, of the LSA and of the EEOA. By recalling the initial aims of thispaper, it is clear that many efforts were made in order to gradually clarify thecontent of such laws. In the end, Japan has somehow embraced the EuroAmerican views on indirect discrimination, but, for now, has adopted a very
cautious approach, which might be justified by the future development of abroader political consensus on which further reforms could be based upon. As
noted above, perhaps a bolder approach in the 2006 reform could have promoted
a quicker response in society, but the mentality that the prohibition of indirectdiscrimination is challenging is quite entrenched in Japan. The timing forstructural reforms is never easy to calculate, and it is not uncommon that theyrequire many years in order to reach their full potential. Waiting for the response of
the labor market, or resorting to more flexible legal sources before imposing
top-down drastic reforms is therefore understandable.
From the point of view of the effectiveness of such reforms, despite theelements missing from a fully-fledged equality of opportunity that includes more
ambiguous indirect discrimination cases, a fruitful osmosis has been establishedbetween the MHLW, the Japanese courts, and the National Diet, ie the executive,
judiciary and legislative branches. With dialogue between the different institutions

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Indirect Discrimination in Japanese Law

68of the State and representatives of the employers and the employees, a minimum
level of compromise is possible. Such an arrangement, although it might notsolve all the existing issues, is more likely to be implemented in an effective way inthe future, since its content, at least in theory, was agreed upon by all the relevant
actors. There are certainly differences between the EU and Japan, but with relation
to the equality principle and its application to labor legislation, it seems thatthey share similar values that are gradually being reflected in the law. In Japan,
legal reform has often been prompted by external pressure, but the same situation
can be found in the Member States of the EU, and it can be said that it is in fact
the capacity of a legal system to respond to crises through change that determines
its ability to survive in the international arena.59 States with institutions capable ofcooperating in a productive manner offer a brighter future, if they can incorporate
best practices from around the world.

59 M. Riminucci, ‘Resilient Japan: Legal Adaptability and Migration’, in L. Ferrara et aleds, Biopolitica dell’immigrazione (Frankfurt am Main: Peter Lang, 2017).

The Protection of Our Image:
Between the Right to One’s Own Image and the Right of
Publicity
Pompeo Polito

Abstract
Through an analysis of the privacy right of publicity (or ‘personality rights’) in theAmerican legal system and the right to one’s own image in the Italian legal system, theauthor demonstrates the strict analogies that exist between these legal institutions,despite the differences in their origins.

I.

Introduction

The desire for protection of the intangible aspects of our life (honour,
reputation, dignity) is very ancient. In Classical Roman law,1 for example, there
were specific actions against injuries uttered in public (convicium)2 or against
rumours spread widely by someone against someone else (infamatio).
Despite this ancient tradition, we can say that the right to one’s own image
is a result of technology’s evolution of image reproduction. Without the inventionof photography and its diffusion, we would not have this right. If we examine
the history of such right (both in common law and civil law) we observe that,
before photography, there was no need to protect our own image.3 Once we

PhD in Roman and Private Law, Sapienza University of Rome.

1 ‘Fin da epoca alquanto antica, l’ordinamento giuridico romano ha conosciuto alcune

norme dirette a tutelare onore, decoro e reputazione offesi. Si può cogliere, anzi, nella storia delladisciplina prevista in questa materia, uno dei più sicuri dati relativi al riconoscimento dellapersonalità individuale in Roma e vi si può contemporaneamente vedere un esempio molto
rilevante dell’ampiezza e della profondità delle modificazioni recate in strutture giuridichearcaiche da una più matura coscienza sociale’ (‘Since ancient times, the Roman legal systemhas known some rules aimed at protecting honor, decoration and offended reputation. On thecontrary, in the history of the regime provided for in this subject, one can grasp one of the mostcertain data concerning the recognition of individual personality in Rome, and at the sametime we can see a very relevant example of the amplitude and depth of the modifications
carried out in archaic juridical structures from a more mature social consciousness’), G. Crifò,‘Diffamazione e ingiuria (diritto romano)’ Enciclopedia del diritto (Milano: Giuffrè,1964), XII, 470.
2 Convicium was ‘a verbal offense against a person’s honor. It was considered an Iniuria
when committed by loud shouting in public (vociferatio)’. A. Berger, Encyclopedic Dictionaryof Roman Law (Philadelphia: The American Philosophical Society, 1953), 416.
3 In this regard we disagree with the opinion, according to which ‘la tutela dell’immagine,
intesa come ritratto, ha un’origine antica. Essa affonda le sue radici in pratiche sciamaniche

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realized that it is only with photography that is possible to reproduce and spread
our image, we acquired the need to protect our privacy.
That stated, we should remember that the common law and civil law havevery differing approaches. In the common law tradition, there is no specific rightto the protection of one’s own image. In contrast, civil law recognizes and protects,
in almost every jurisdiction, a specific right to one’s own image.
Both these rights (privacy and right to one’s own image)4 have a form of‘birth date’ in the era of photography development.
II. The Birth of the Right to Privacy
The right of privacy was born with the famous work of Samuel D. Warren
and Louis D. Brandeis.5 These two Boston lawyers, towards the end of thenineteenth century,6 theorized privacy as the right to be alone, as a civil andche si fondavano sulla credenza per cui la manipolazione dell’immagine di una persona potesseconsentire di infliggere danni o benefici al corpo o alla psiche della persona ritratta’ (theprotection of the image, understood as a portrait, has an ancient origin. It has its roots inshamanic practices that were based on the belief that the manipulation of the image of a person
could allow to inflict damage or benefits to the body or psyche of the person portrayed), F.
Benatti, ‘Danno all’immagine’ Digesto civile (Torino: UTET, 2011), VI, 275.
4 Considering the first developments of this right, there is often quoted a case regarding
the American painter, James Whistler. Early in 1894 Whistler painted a small portrait of Lady
Eden (Hunterian Museum and Art Gallery, Glasgow), and her husband, Sir William Eden, who
sent one hundred pounds for it, which Whistler banked. Whistler exhibited the picture in Parisbut refused to deliver it and Eden instituted legal proceedings. Thereupon, Whistler returned
the money but scraped out the figure, substituting that of an American sitter in its place, so that
if he lost the case, the portrait could not be recovered. At the civil tribune in March 1895,
Whistler was ordered to hand over the portrait and pay damages but after two appeals, in 1897
and 1900, Whistler was finally granted the picture and Eden was ordered to pay expenses. In
Eden versus Whistler: the Baronet and the Butterfly (1899), Whistler published his account of
the case, which entered French law by establishing that artists do not enter into ordinary
commercial contracts of sale with their patrons.
According to F. Cionti, All’origine del diritto all’immagine. Dall’immagine dipinta all’immagine
fotografata della cosa (Milano: Giuffrè, 1998), 12-30, who expressly based a large part of hisanalysis on the work of M. Ricca-Barberis, ‘Il diritto all’immagine (casi e pareri della vecchia
bibliografia francese e tedesca)’ Rivista di Diritto Civile, I, 226 (1958), the issue of the right toone’s own image was born already with painting but even allowing for this, the situation
completely changed with the advent of photography (ibid 31-75).
5 S.D. Warren and L.D. Brandeis, ‘The right to privacy’ 5 Harvard Law Review, 193-220(1890).
The authors state the purpose of the article as: ‘it is our purpose to consider whether the
existing law affords a principle which can properly be invoked to protect the privacy of theindividual; and, if it does, what the nature and extent of such protection is’, ibid 197.
6 The recognition of the same right in Italy arrived much more later. The first time theword privacy as ‘riservatezza’ was used by M. Giorgianni, ‘La tutela della riservatezza’ Rivista
trimestrale diritto e procedura civile, I, 13-30 (1970), then it appeared in the legge 20 maggio
1970 no 300, Art 6 ‘Le visite personali di controllo sul lavoratore sono vietate fuorché nei casi
in cui siano indispensabili ai fini della tutela del patrimonio aziendale, in relazione alla qualitàdegli strumenti di lavoro o delle materie prime o dei prodotti. In tali casi le visite personali

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non-contractual right of protection against invasion of privacy. They concluded7
that the development of ‘instantaneous photographs and newspaper enterprise
have invaded the sacred precincts of private and domestic life’.8 Privacy, at leastat its beginning, is an environment in which no one is permitted to enter without
our permission, so the issue of one’s own image protection is linked to thatenvironment. Personality rights originate, indeed, in the ‘right to privacy’.
Given the importance of the establishment of the right to privacy,9 for
purposes of this paper, it may serve to offer a brief analysis of the background.
First, Warren and Brandeis examined the law of slander and libel (forms ofdefamation) to determine if it adequately protected the privacy of the individual.
The authors concluded that this body of law was insufficient to protect the privacyof the individual because it ‘deals only with damage to reputation’.10 In otherwords, defamation law, regardless of how widely circulated or unsuited topersonality rights, requires that the individual must suffer a direct effect in his
or her interaction with other people.
Second, in the next several paragraphs, the authors examined intellectual
property law to determine if its principles and doctrines sufficiently protected
the privacy of the individual and they concluded that‘the protection afforded to thoughts, sentiments, and emotions, expressed
through the medium of writing or of the arts, so far as it consists in preventing
publication, is merely an instance of the enforcement of the more generalright of the individual to be let alone’.
Warren and Brandeis then discussed the origin of what they called a ‘rightto be let alone’. They explained that the right of property provided the foundation
potranno essere effettuate soltanto a condizione che siano eseguite all’uscita dei luoghi dilavoro, che siano salvaguardate la dignità e la riservatezza del lavoratore e che avvengano
con l’applicazione di sistemi di selezione automatica riferiti alla collettività o a gruppi dilavoratori (…)’ (Personal check-ups on the worker are prohibited except in cases where they
are indispensable for the protection of the company’s assets, in relation to the quality of thework tools or raw materials or products. In such cases, personal visits may be carried out only
on condition that they are performed at the exit of the workplace, that the worker’s dignity andprivacy are safeguarded and that they occur with the application of automatic selection systems
referring to the community or groups of workers (...)).
7 Warren had a wife who practiced worldly habits, frequenting night-time dances andoften coming home late, even accompanied by gentlemen other than her husband. The chronicle ofBoston was always interested in the activities of the lady, making known the private details
through a local daily newspaper selling around eighty thousand copies. For this reason, Warren and
Brandeis decided to write their work about privacy. See A. Gajda, ‘What if Samuel D. Warren
Hadn’t Married a Senator’s Daughter? Uncovering the Press Coverage that Led to The Right toPrivacy’ 35 Michigan State Law Review, 35-59 (2008).
8 n 5 above, 195.
9 ‘The right to privacy is, as legal concept, a fairly recent invention’, see D.J. Glancy, ‘The
invention of right to privacy’ 21 Arizona Law Review, 1-39 (1979).
10 n 5 above, 197.

2018]The Protection of Our Image72

for the right to prevent publication. However, at that time, the right of property
only protected the right of the creator to any profits derived from the publication.
The law did not yet recognize the idea that there was value in preventing
publication. As a result, the ability to prevent publication did not clearly exist as
a right of property.
Finally, Warren and Brandeis considered the remedies and limitations of
the newly conceived right to privacy. The authors acknowledged that the exact
contours of the new theory were impossible to determine but several guiding
principles from tort law and intellectual property law were applicable.
Such principles are: I. the right to privacy does not prohibit any publication
the matter of which is of public or general interest;11 II. the right to privacy does
not prohibit the communication of any matter which, though in its nature
private, when the publication is made under circumstances, would render it a
privileged communication, according to the law of slander and libel; III. the law
would probably not grant any redress for the invasion of privacy by oral
publication, in the absence of special damage; IV. the right to privacy ceases
upon the publication of the facts by the individual or with his consent; V. thetruth of the matter published does not afford a defence; VI. the absence of‘malice’ in the publisher does not afford a defence; VII. with regard to remedies,a plaintiff may institute an action for tort damages as compensation for injury
or alternatively request an injunction.
As a closing note, Warren and Brandeis suggested that criminal penalties
should be imposed for violation of the right to privacy but they declined toelaborate further on the matter, deferring instead to the authority of the legislature.
The work of Warren and Brandeis was extremely successful in American
jurisprudence; their theories were quite soon embraced by several decisions
which have been analysed by William L. Prosser. He identified a complex offour torts: 1. intrusion upon the plaintiff’s seclusion or solitude or into his private
affairs; 2. public disclosure of embarrassing private facts about the plaintiff; 3.
publicity which places the plaintiff in a false light in the public eye; 4. appropriation,
for the defendant’s advantage, of the plaintiff’s name or likeness.12

11 Warren and Brandeis elaborated on this exception to the right to privacy by stating: ‘In
general, then, the matters of which the publication should be repressed may be described as
those which concern the private life, habits, acts, and relations of an individual, and have nolegitimate connection with his fitness for a public office which he seeks or for which he issuggested, or for any public or quasi public position which he seeks or for which he is suggested,and have no legitimate relation to or bearing upon any act done by him in a public or quasi
public capacity. The foregoing is not designed as a wholly accurate or exhaustive definition,
since that which must ultimately in a vast number of cases become a question of individual
judgment and opinion is incapable of such definition; but it is an attempt to indicate broadly
the class of matters referred to’, n 5 above, 216.
12 W.L. Prosser, ‘Privacy’ 48 California Law Review, 383-423, 389 (1960).

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III. The Right of Publicity: Its Origin and Development
It was through the tort of the appropriation, for the defendant’s advantage,of the plaintiff’s name or likeness that United States jurisprudence elaborated
the modern right of publicity.13
More than a century ago, New York’s highest court, the Court of Appeals,
was asked to find a right to privacy in a case brought by a young woman whose
portrait had been used without her prior consent, in an advertisement for aflour company. The court rejected the request but its ruling was followed bypublic outrage that led the State’s legislature promptly to enact a statute creating aright to privacy that exists to this day.
In 1902, in Roberson v Rochester Folding Box Co, 25,14 the plaintiff brought
an action against a flour manufacturer, claiming an infringement of her right toprivacy due to unauthorized printing, sale and circulation of twenty-five thousand
lithograph prints of her image.
The court summarized the plaintiff’s complaint:‘Such publicity, which some find agreeable, is to plaintiff very distasteful,and thus, because of defendants’ impertinence in using her picture, without
her consent, for their own business purposes, she has been caused to suffer
mental distress where others would have appreciated the compliment totheir beauty implied in the selection of the picture for such purposes’.
The court refused to recognize a common law right of privacy in this case,fearful of opening the litigation floodgates but in 1903 the New York legislatureenacted sections 50, 51 and 52 of the New York Civil Rights Law,15 overruling
Roberson and made it an offense and a tort to use a person’s ‘name, picture or
photograph’ in advertising or trade without his or her consent.16
13 In this regard, see S. Barbas, ‘From Privacy to Publicity: The Tort of Appropriation in

the Age of Mass Consumption’ 61 Buffalo Law Review, 1119-1189 (2013).
14 Roberson v Rochester Folding Box Co 171 NY 538, 64 NE 442 (1902).
15 The Civil Rights Law was an act relating to civil rights, constituting chapter six of theconsolidated laws (which are the codification of the permanent laws of a general nature of
New York enacted by the New York State Legislature) and it became a law on 17 February 17
1909 with the approval of the Governor.
16 Section 51 recognizes in this case an action for injunction and for damages ‘Any person
whose name, portrait, picture or voice is used within this state for advertising purposes or forthe purposes of trade without the written consent first obtained as above provided may
maintain an equitable action in the supreme court of this state against the person, firm or
corporation so using his name, portrait, picture or voice, to prevent and restrain the use
thereof; and may also sue and recover damages for any injuries sustained by reason of such use
and if the defendant shall have knowingly used such person’s name, portrait, picture or voice insuch manner as is forbidden or declared to be unlawful by section fifty of this article, the jury,
in its discretion, may award exemplary damages. But nothing contained in this article shall be
so construed as to prevent any person, firm or corporation from selling or otherwise transferring
any material containing such name, portrait, picture or voice in whatever medium to any userof such name, portrait, picture or voice, or to any third party for sale or transfer directly or2018]The Protection of Our Image74

The right of publicity developed, as celebrities sought recognition for the far
more lucrative claims for the value of their endorsement. Having relinquishedmuch of their ‘privacy’ as far as being in media or participating in advertisingand marketing, their focus was on the value of their endorsement andsubsequently this authorization – more of a license than a release – became
extremely valuable.
For these reasons, formal recognition of the modern right of publicity is
usually traced to the case of Haelan Laboratories, Inc v Topps Chewing Gum,
Inc a 1953 decision of the United States Circuit Court of Appeals for the Second
Circuit.17
In Haelan, one producer of baseball cards packaged with bubble gum (theBowman Gum Company) sued another (Topps Chewing Gum), alleging thatthe latter had infringed exclusive contracts that the first producer had secured
with many Major League baseball players.
Prior to the Haelan decision, the boundaries of an individual’s publicity
rights were not clear. On the one hand, it was widely accepted that there was aright of privacy which protected individuals from the unauthorized use of theirnames or images for commercial purposes, even if they were public figures.
However, this right was not typically thought of as a ‘property right’ but rather
as a right to bring an action in tort. As such, it was not clear that individual
publicity rights could be alienated or enforced by a third party. Further
complicating the matter was that the right of privacy was derived from theindirectly to such a user, for use in a manner lawful under this article; nothing contained in thisarticle shall be so construed as to prevent any person, firm or corporation, practicing theprofession of photography, from exhibiting in or about his or its establishment specimens of
the work of such establishment, unless the same is continued by such person, firm or corporation
after written notice objecting thereto has been given by the person portrayed; and nothing
contained in this article shall be so construed as to prevent any person, firm or corporationfrom using the name, portrait, picture or voice of any manufacturer or dealer in connection
with the goods, wares and merchandise manufactured, produced or dealt in by him which hehas sold or disposed of with such name, portrait, picture or voice used in connection therewith;or from using the name, portrait, picture or voice of any author, composer or artist inconnection with his literary, musical or artistic productions which he has sold or disposed ofwith such name, portrait, picture or voice used in connection therewith. Nothing contained inthis section shall be construed to prohibit the copyright owner of a sound recording from
disposing of, dealing in, licensing or selling that sound recording to any party, if the right todispose of, deal in, license or sell such sound recording has been conferred by contract or otherwritten document by such living person or the holder of such right. Nothing contained in theforegoing sentence shall be deemed to abrogate or otherwise limit any rights or remedies
otherwise conferred by federal law or state law’.
17 Haelan Laboratories, Inc v Topps Chewing Gum, Inc, 202 F.2d 866 (2d Cir 1953).
Scholars agree that this case was the formal recognition of right of publicity. See D. Maffei, ‘Il
right of publicity’, in G. Resta ed, Diritti diritti esclusivi e nuovi beni immateriali (Torino:
UTET, 2010), 511-548, 515; J. Gordon Hylton, ‘Baseball Cards and the Birth of the Right of
Publicity: The Curious Case of Haelan Laboratories v. Topps Chewing Gum’ 12 Marquette Sports
Law Review, 273-294, 273 (2001); S. Martuccelli, ‘The Right of Publicity under Italian Civil Law’
18 Loyola of Los Angeles Entertainment Law Journal, 543-563, 551 (1998).

75

The Italian Law Journal[Special Issuecommon law in some jurisdictions and from statutes in others.
In his majority opinion in Haelan, Judge Jerome Frank moved beyond thetort analysis and found that individuals (here, Major League baseball players)
also possessed a property right in their own images. More importantly, in Judge
Frank’s view, this right could be transferred to a third party who then had thesame right as the individual himself to enforce it against competing but
unauthorized users. Other jurisdictions were initially reluctant to follow Judge
Frank’s lead; as late as 1970, courts in only five states (Pennsylvania, Georgia,
New Jersey, Hawaii and Missouri) had recognized the existence of a right ofpublicity of the sort described in Haelan and in only two states (Oklahoma andFlorida) had the principle been adopted by statute. However, by 2000, the numberof American jurisdictions recognizing the right of publicity by either judicial
ruling or statute had reached twenty-eight and the Restatement of Unfair
Competition identifies it as an essential part of the American law of intellectual
property.18
The right of publicity expanded through the second half of the twentiethcentury, with further statute and case law development increasing its scope.
When Elvis Presley died in 1977, his personal manager objected when a poster
immediately appeared with his image and the words ‘In Memoriam’.19 It was
clear that Elvis’s right of publicity would continue to be valuable for as long as it
was kept ‘alive’. Thus the post-mortem rights for the heirs or the estate becamea battleground for litigation and legislation. Consequently, the right of publicity
was untethered from privacy. The most public celebrity could protect the valueof his or her name or association when commercialized and it would not end
with the celebrity’s death.
All through its development, as new technologies for communication werecreated, the right expanded to encompass additional bases for celebrities to state
claims for compensation. Voice and voice imitation, signature or gesture wereadded to those aspects of identity which could be recognized as the basis for aclaim. In this regard, in the US case brought by Lindsay Lohan, she argued thather privacy rights under New York Civil Rights Law, Section 51 was violated by acharacter of the video game Grand Theft Auto.20
For the Italian experience was the case of the popular singer, Lucio Dalla,
against an Italian company, Autovox SPA, a producer of audio equipment suchas radios, compact disc players and stereos. Dalla alleged that Autovox
misappropriated his persona in an advertising poster by using two of the mostdistinctive elements of his appearance, viz a woolen cap and a pair of small,round glasses. Dalla argued that the use of the cap and glasses constituted a
18 On December 28, 1994, the American Law Institute officially published the Restatement(Third) of Unfair Competition (1995). In §§ 46-49 of this Restatement (Topic 3 of Chapter 4),
that institute for the first time recognized a full-blown commercial ‘right of publicity’.
19 Factors Etc, Inc v Pro Arts, Inc, 579 USA F.2d 215 (2nd Cir 1978).
20 Lohan v Take-Two Interactive Software, Inc, 24 Court of Appeal of New York, 2018.

2018]The Protection of Our Image76

misappropriation of his persona because they created an immediate association
between himself and Autovox. He further alleged that the advertisement damaged
his reputation because consumers were likely to believe that he endorsed Autovox’s
products, despite the fact that Dalla consistently refused to appear in commercials.21
Nowadays, the right of publicity continues to expand to encompass moreelements of personality and more media and forms of communication. Traditionally,
trained advertising professionals were previously in the creation of advertising
campaigns and were careful to obtain necessary licenses. Advertising agencies
also provided the advertiser with insurance that covered such rights of publicity
claims. Nowadays, content commissioned and paid for by advertisers is sometimes
created without input from advertising professionals and content may include
discussions of popular cultural events and celebrities. When it also includes
product placements and advertiser-dictated content or even just an advertiser’s
credit for sponsoring or underwriting the cost of the content, it may expose theadvertiser to claims by people who are identified in the content.
IV. The Right to One’s Own Image
The origins of a right to one’s own image in Europe are partially different
and linked to the first known ‘paparazzi’ case.22
The shocking image of the dead German Chancellor, Otto von Bismarck(1815–1898), lying dishevelled, propped-up on his deathbed is the world’s first‘paparazzi’ photograph. The clandestine photograph was taken by two young
photographers, Max Priester and Willy Wicke, on 30 July 1898. They broke into
Bismarck’s chambers by bribing a servant and photographed his corpse only a
few hours after his death; in fact, the deceased Chancellor’s family had only just
paid its last respects and left the bedroom when the photograph was taken. No
one except Chancellor’s family was permitted to see Bismarck’s last moments.
This grainy black and white photograph of Bismarck’s corpse turned out tobe the final image of the great leader; no ‘official’ death mask or post-mortem
21 Pretura di Roma, 18 April 1984, Foro Italiano I, 2030 (1984) with comment from R.
Pardolesi and Giurisprudenza Italiana, I, 2, 453 (1985), with comment from M. Dogliotti,‘Alcune questioni in tema di notorietà, diritto all’immagine e tutela della personalità’ and ibid
551 with comment of M. Garutti, ‘Utilizzazione in una campagna pubblicitaria di accessori
abitualmente usati da una persona’.
According to S. Martuccelli, n 17 above, 548 ‘the judge in the Dalla case reasoned thatsuch protection should also apply to unauthorized uses of attributes of one’s persona, hence
creating a right similar to the American right of publicity’.
22 With the term paparazzo, we define (sometimes in a derogatory way) those photographers
specialized in photographing famous people in public places or in their private sphere, almost
always looking for the most particular, rare, more compromising situations (in order to obtain
more money). The term is derived from and spread thanks to the film by Federico Fellini, La
dolce vita, in which a character (played by Walter Santesso), who practices this profession, has
the surname Paparazzo.

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The Italian Law Journal[Special Issue

portraits were made. Bismarck’s emaciated face peers out from above a sea of
bedcovers and pillows, exposed in the cruel, bright ray of magnesium light usedby the photographers to illuminate the scene. Save for a protruding right hand,
Bismarck’s collapsed body lies invisible beneath the bed sheets. In this iconoclastic
image, Bismarck, the national hero who unified Germany, is revealed in a frail
and un-heroic state; a chamber pot at his bedside, he slips from the world, muchas his body slides underneath the sheets.
Like the photographers who sell their images to the world’s media today,
Priester and Wicke tried to hawk their newsworthy ‘scoop’ featuring the dead‘celebrity’ to the German newspapers, who declined to publish it. They advertised
the image in the newspaper, Tagliche Rundschau on 2 August 1898,‘for the sole existing picture of Bismarck on his deathbed, photographs
taken a few hours after his death, original images, a buyer or suitable publisher
is sought’.
Priester’s and Wicke’s behaviour caused public outrage in Germany. It led
to the confiscation of their plates by the police and to civil and criminal legal
proceedings being brought against them in 1899.
In the end, Priester was sentenced to five months’ imprisonment and Wicke
received an eight months’ sentence.23 Their censored plate was handed over toBismarck’s family, where it remained out of sight for a long time though,remarkably, it was not destroyed. Instead, it was to resurface after World War
II, to circulate in a context in which such images did not seem so shocking in thewake of the War’s atrocities. Today, the image is readily accessible on the Internet.
The image of the dead Bismarck marks one of the first encounters between
the law and photography. At the heart of this encounter, we find what might bedescribed as three categories of image ‘offence’, all of which are conflated in thetaking, content and (attempted) distribution of this disturbing photograph.
The first offence is the means by which the photograph is taken, seen here
in the duplicitous intrusion by the photographers into the ‘sacred’ realm ofBismarck’s home. The second offence is the ‘content’ of the photograph, namely
the intimate and undignified image of the dead Bismarck, a sight which was
only supposed to be visible to Bismarck’s family members (even Kaiser Wilhelm
II was denied permission by Bismarck’s family to view his dead body). The thirdoffence is the ‘distribution’ of the photograph, namely the way in which thephotographers sought to exploit it by selling or licensing it for profit, thereby
transforming the dead Bismarck into a commodity.
It is, perhaps, no accident that the scandal caused through the explosive
combination of all three image offences in Priester’s and Wicke’s photograph
23 The case of the Bismarck death photography was detailed described by J. Kohler, ‘Der
Fall der Bismarckphotographie’ 5 Gewerblicher Rechtsschutz und Urheberrecht, 196–210 (1900).

2018]The Protection of Our Image

78

would directly lead to the passage of one of the first laws of image rights, viz
section 22 of the German Copyright Act (Gesetz betreffend das Urheberrecht
an Werken der bildenden Künste und der Photographie 1907). In this law,
German legislators, troubled by the wound caused by the scandal, devised a
way to grant the subject ‘rights’ over their image to protect their personality.
From then on, permission by the subject portrayed would be required whenphotographs of them were taken and disseminated, though an exemption was
granted for public persons or ‘figures of contemporary history’, who would havelesser protection and these rights could persist even after their death and be
exercised posthumously by their family relatives.
Since then, ‘consent’ became the key point of right to one’s own image andthis is why in Italy we have, in legge 22 April 1941 no 633 for the protection of
copyright, a specific section for rights on portraits.
In this section, Art 96 provides that the portrait of a person may not be
displayed, reproduced or commercially distributed without the consent24 of such
person or, after his death, without the consent of his heirs.
In contrast, according to Art 97,25 the consent of the person portrayed is
not necessary if the reproduction of the portrait is justified by his notoriety26 or
his holding of public office, or by the needs of justice or the police, or for
scientific, didactic or cultural reasons, or when reproduction is associated withfacts, events and ceremonies which are of public interest or which have takenplace in public.27
24 Regarding consent we have to remember the decision of Corte di Cassazione, 29January 2016 no 1768, Il Diritto Industriale, 55 (2017) with comment of A. Geraci, ‘Il negozio
unilaterale per il consenso alla pubblicazione della propria immagine’; Danno e responsabilità,
47 (2017) with comment of E. Barni, ‘Cassazione e diritto all’immagine: divulgazione delritratto per scopi pubblicitari, revocabilità del consenso, tutela risarcitoria’.
With this judgment the Corte di Cassazione stated that consent for the publication of
one’s own image constitutes a unilateral deed, having as its object not the personal andinalienable right to the image but only the exercise of that right, so that although it may beoccasionally included in an agreement, the consent remains distinct and independent fromthe agreement that contains it and is always revocable, whatever the deadline indicated forthe permitted publication and regardless of the agreed stipulation, which does not integrate
an element of the authorization deed.
25 The first Italian law on copyright (legge 25 June 1865 no 2337) did not contain any
provision regarding the right to one’s own image while Art 11 of Legge 18 March 1926 no 562
was substantially similar to the Arts 96 and 97, quoted above.
26 In this regard we remember the recent case of theatric show about the famous Italiansinger and actor Domenico Modugno. See Tribunale di Roma, 17 July 2015, Il Diritto Industriale,
273 (2017) with comments of F. Florio, ‘Il diritto all’immagine, la necessità del consenso e lesue eccezioni’, and M. Maggiore and L. Zoboli, ‘Interesse pubblico ed eccezione culturale: lelimitazioni al diritto all’immagine dei personaggi famosi’.
27 Public events have been always deemed to be situations in which consent of the portrayedperson is not necessary. See M. Ricca-Barberis, ‘Il diritto alla propria figura’ Rivista del diritto
commerciale, industriale e marittimo, I, 3-12, 3 (1903) ‘non viola il diritto individuale colui
che armato di una Kodak fotografi per la via un’altra persona anche se questa non lo voglia,

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However, the portrait may not be displayed or commercially distributed if
its display or commercial distribution would prejudice the honour, reputation
or dignity of the person portrayed.
The Italian normative system about such a right28 is made also by Art 10 of
the Civil Code, which provides that if the image of a person or the parents or the
spouse or child has been exposed or published except in cases where exposure
or publication and permitted by law, or with prejudice to the dignity or reputationof the person or of those relatives, the authorized court, on application, may
provide for an end to the abuse, though not for damages. The article does notcontain any reference to consent because it was expressly written to give a wider
protection to the right to one’s own image, considering the provision of Art 11 oflegge 18 March 1926 no 562.29
Contrasting the right of publicity and right to one’s own image, there exist,
apparently, two different legal institutions (the latter, in particular, should be
one of the personal rights, such as freedom and it was analysed in detail by
German jurists after the Bismark case).30 In reality, in reviewing the work of
Eduardo Piola Caselli, the father of the Italian Copyright Law, we see that theinstitutions are substantially similar.31

chi passeggia per la strada sa di esporsi ai suoi simili: che poi la sua immagine si imprima
fuggevolmente sulla retina di un occhio umano o durevolmente sulla pellicola di una
macchina fotografica, poco importa’ (who armed with a Kodak takes a picture of someone on
the street does not violate any individual right even if he does not want; who walks the street
knows how to expose himself to his fellow men: if his image is impressed on the retina of ahuman eye or durably on the film of a camera, it does not matter).
28 There is a huge literature about the right to one’s own image, but for deep and exhaustive
analysis see M. Proto, Il diritto e l’immagine. Tutela giuridica del riserbo e dell’icona personale(Milano: Giuffrè, 2012).
29 See E. Piola Caselli, Codice del diritto d’autore. Commentario della nuova legge 22 aprile
1941-XIX, n. 633 (Torino: Unione Tipografica Editrice Torinese, 1943), 506, 507.
30 Referring to the Recht am eigenen Bilde. See ibid 504-505.
31 ‘La riproduzione della nostra immagine in un ritratto che avvenga in quelle stessecondizioni nelle quali avviene la quotidiana esposizione della nostra figura agli occhi del pubblico,
non può di per sé offendere alcun diritto né ledere alcun ragionevole interesse della persona.
L’offesa non sorge se non quando la riproduzione o la diffusione dell’immagine avvengano aldi fuori di queste condizioni normali e siano per così dire qualificate per talune circostanze
particolari che urtano veramente il sentimento giuridico (…). Ma allora noi dobbiamo direche la lesione giuridica va riferita ad un’altra causa che esiste al di fuori o al di sopra di questo
diritto; e che consiste in fondo in quella esplicazione del diritto generale della libertà e dignità
personale che gli inglesi hanno chiamato diritto dell’intimità o right of privacy’ (The reproductionof our image in a portrait occurring in the same conditions in which the daily exposure of our
figure to the eyes of the public takes place, can not in itself offend any right or harm any reasonableinterest of the person. The offense does not arise unless the reproduction or the diffusion of theimage take place outside of these normal conditions and are, so to speak, qualified for certain
particular circumstances that really impact the legal feeling (...). Then we must say that the legal
injury must be referred to another cause that exists outside or above this right; and which consists
basically in that explication of the general right of freedom and personal dignity that the
English have called the right of intimacy or right of privacy). See ibid 505-506.

2018]The Protection of Our Image

80

V. Nowadays
Facebook, Linkedin or Whatsapp sought to make almost everyone a ‘celebrity’.
Twenty years ago, one could only find pictures of genuinely well-known people
but nowadays a Google search will produce the name and photographs of almost
anyone.
The fact that videos and photographs are today made exclusively in digitalformats led, indeed, to a wider circulation of images that now transfer fromsmartphones to social networks and from social networks to various web sites
and are downloaded again on devices and often modified and reused.
It is precisely because of the unstoppable expansion of these phenomenathat search engines have, for a long time, offered the ‘image search service’ thatallows every user of the network to find, for each noun or adjective, dozens ofimages that the search engine research considers ‘correspondent’ to that word,
according to the cold logic of its algorithm. If I search for ‘ugly’ on Google
images, whose face would Google give me as result? Could one trust that such
result is accurate?
In light of these considerations, if on the one hand, it is true that therecognition and affirmation of a right of publicity is undoubtedly caused by theadvent and the development of photography, we have to acknowledge that theconcomitant evolution of these phenomena (digitalization and access to the
network) has radically changed our habits and our sensitivity to our right ofpublicity and of our privacy.
For these reasons we face two demands which are diametrically opposed toeach other. We spread our image on the network32 continuously. In many cases,
personal photographs are not retained purely privately but are shared with others
immediately after being taken.33 At the same time, however, our sensitivity to
our own image has become sharpened. Not long ago, despite it being explicitly
recognized in almost every legal system, the right to the protection of our own
image was considered a right only of those people who enjoyed a certain amount ofnotoriety (actors, politicians, sports personalities, etc). Today it is a right thateveryone perceives as his own.
Despite the efficiency of the legal system (both common law and civil law)in protecting our image, the only possible protection of it in an Internet era34 is
32 But always giving our consent. Only when we see that our picture is used in a way that

violates our honor or our reputation we would delete it forever from Internet. See, in thisregard, the case of Caitlin Seida, https://tinyurl.com/y8u9wgvt (last visited 15 November 2018).
33 Considering the phenomenon of fotosociality, delivered through the Samsung camera
which is able immediately to post pictures on social networks without first downloading them.
34 ‘Il concetto di oblio non esiste su Internet. I dati, una volta pubblicati, possono rimanerci
letteralmente per sempre – anche se la persona interessata li ha cancellati dal sito “originario”,
possono esisterne copie presso soggetti terzi; appartengono a quest’ultima categoria i servizi
di archivistica e la funzione di “cache” disponibile presso un notissimo motore di ricerca.
Inoltre, alcuni fornitori di servizi rifiutano di ottemperare (o non ottemperano affatto) alle

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The Italian Law Journal[Special Issue

to follow the advice of Epicurus, to ‘live secretly’. Maybe it is time to relinquish
any protection of our image.

richieste degli utenti di ottenere la cancellazione di dati e, soprattutto, di interi profili’ (Theconcept of oblivion does not exist on the Internet. The data, once published, can remain literally
forever – even if the person concerned has deleted them from the “original” site, there may becopies to third parties; the archiving services and the “cache” function available in a wellknown search engine belong to the latter category. In addition, some service providers refuse tocomply (or fail to comply) with user requests for data deletion and, in particular, for entire
profiles) (Garante per la protezione dei dati personali, Rapporto e Linee-Guida in materia diprivacy nei servizi di social network ‘Memorandum di Roma’, 3-4 March 2008).

The Public Administration and the Citizens Privacy
Protection.
A Comparison Between European Union and Japan
Giacomo Mannocci

Abstract
Cybersecurity and privacy protection are strategic objectives to ensure free tradeand economic freedom in a global society. Precisely for this reason, recently, the European
Union and Japan have changed their legislation on the protection of personal data,
strengthening the powers of control and regulation by public bodies. Ensuring citizensof the proliferation of data on the internet has become a necessity. This is demonstrated
by the recent scandals involving Facebook and Cambridge Analytica.

I.

Introduction

In the past years privacy protection and information security have become
topical: the Privacy Right, meant as the right to protect the inner life from various
interferences, is strictly linked to the tutelage of a person dignity.
The emergence of social networks and internet development created a new
problem: the ‘unauthorized profiling’ of personal data. The services offered oninternet, inevitably require the acquisition of information regarding the personal
sphere: every day, a huge quantity of personal data, imagines and inclinations are
put online. So, the data became exchange goods always more exposed tocontinuous collection and monitoring, often in occult ways. The ‘Over The Top’
(that is a label to indicate the big internet monopolists which declared acommercial interest) collect and register personal data in huge servers; thesedata are provided by the users for many different reasons. In this way suchsocieties realize the most sophisticated forms of behavioral advertisement,
becoming brokers, even more exclusive, between producers and consumers, theyorientate choices and often knowledge, accumulate major wealth and negotiate
as pair with governments. Governments and police authorities themselves collectand treat data put on the net by the users for legitimate security reasons. The
will to prevent terroristic threats immeasurably multiplied the collection andclassification of information and data regarding citizens lives and behaviors.
In this social contest it becomes even more necessary to find a balance

PhD in Constitutional Law, University of Genoa.

2018]The Public Administration and the Citizens Privacy Protection

84

between the need to protect people privacy (and so dignity), by ensuring national
and international security from terroristic threats and, at the same time, thepriority of supporting free circulation of data and free competition between
economical operators.
The privacy regulation is in continuous evolution because it has ‘to run
after’ and ‘to answer’ to new information and technological discoveries. For thisreason, it is interesting to analyze, in a comparative way, how European Union
and Japan have recently modified their legislation about personal data protection.
On 25 May 2018 came into force the new Privacy European Regulation1 which
replaces the one of 1996.2 The previous year, on 30 May 2017 in Japan, cameinto force the new privacy laws which replaced quite totally those of 2003 andtook into consideration the technologic evolution of the last decade.
In the current contribution, the European and the Japan Regulation will beseen by a particular perspective: it will be examined how Public Administration
protect privacy of its citizens and most of all how it guarantee their rights against
the intrusiveness of economic operators. The recent scandal that involved
Facebook is an example: the well-known social network yielded millions data of
its users to the society called Cambridge Analytica,3 which in turn has used them toinfluence voter choices in many electoral competitions. So the active role of
Public Institutions becomes fundamental to avoid not only the privacy violation
but also the market alteration due to an unfair competition.
II. The Privacy Protection in Japan
In Japan, the privacy protection of personal data has an implicit foundationin the Art 13 of the Constitution, according to which

1 Regulation (EU) 2016/679 of the European Parliament and of the Council of 27 April
2016 on the protection of natural persons with regard to the processing of personal data andon the free movement of such data, and repealing Directive 95/46/EC (General Data Protection
Regulation).
2 The GDPR supersedes EC Directive 46/95 currently in force, implemented in Italy throughthe Legislative Decree 196/03 (Data Protection Law). The Legislative Decree on the harmonization of
the national legislation with the provisions of the GDPR (the ‘Decree 101/2018’), which amends
Legislative Decree 196/2003 (the ‘Privacy Code’) was published on 4 September 2018 and it
is came into force on 19 September 2018. The new regulatory framework for the protection of
personal data is therefore made up of the GDPR, the amended Privacy Code, Decree 101, but also
Law 11 January 2018 no 5 (telemarketing reform), as well as Legislative Decree 18 May 2018
no 51 (regarding the protection of personal data in processing for the purposes of prevention,
investigation, verification and prosecution of crimes or execution of criminal sanctions).
3 For a more detailed historical reconstruction, see Information Commisioner’s Office,Investigation into the use of data analytics in political campaigns, 2018, available athttps://ico.org.uk/media/action-weve-taken/2259371/investigation-into-data-analytics-forpolitical-purposes-update.pdf (last visited 15 November 2018).

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The Italian Law Journal[Special Issue‘All of the people shall be respected as individuals. Their right to life,
liberty, and the pursuit of happiness shall, to the extent that it does notinterfere with the public welfare, be the supreme consideration in legislationand in other governmental affairs’.4
Japan’s Act on Protection of Personal Information (Act no 57 of 2003, known
by the acronym APPI), one of Asia’s oldest data protection laws, was originallycreated in 2003, and came into effect in 2005.5 Over the following decade,developments in information technology and the globalization of data have had
the effect of aging the APPI and shifting it out of line with internationallyaccepted standards. On 24 June 2014, the Japanese Government published the
Policy Outline of the Institutional Revision for Use of Personal Data.6 Changes
to the APPI were passed by the Diet in September 2015. Some provisions,mainly those establishing and governing the Personal Information Protection
Commission (PPC) (1 January 2016), are in force, and the remaining provisions
are taking effect on 30 May 2017.7
As groundwork for the enforcement of the new APPI the Government has
prepared the amended basic policy of the protection of personal information as
decided by the Japanese Cabinet on 28 October 2016, the new cabinet order8
the enforcement rules of the Amended APPI as published on 5 October 2016
and the guidelines9 of the Amended APPI. The guidelines of the Amended APPI,
which were published on 30 November 2016, contain guidance regarding: generalrules, offshore transfer of personal data, book-keeping and verification obligations
when transferring personal data to a third party and big data processing. Thesefoundational policies, rules and guidelines will become effective upon theenforcement date of the Amended APPI.
The 2015 law is deeply innovative compared with the past one and it
guarantee more protection to citizens, in fact the limit which scheduled the rule
applicability only to the economic operators which had personal information
database containing details of more than five thousand persons on any day in
4 For a more detailed analysis and discussion on Japanese Constitution, see S. Matsui,
The Constitution of Japan: A Contextual Analysis (London: Bloomsbury Publishing Plc, 2010).
For a more detailed explanation and interpretation of the Human rights in Japan, see T.
Kuramochi, ‘The Protection of Human Rights and the Role of Constitutional Judicial Review inJapan’ 26 King’s Law Journal, 252-265.
5 Act no 57 of 30 May 2003, enacted on 30 May 2003 except for Chapters 4 to 6 and Arts
2 to 6 of the Supplementary Provisions; completely enacted on 1 April 2005 and amended by
Act no 49 of 2009 and Act no 65 of 2015.
6 Strategic Headquarters for the Promotion of an Advanced Information and Telecommunications
Network Society, Policy Outline of the Institutional Revision for Utilization of Personal Data,
2014, available at https://tinyurl.com/y9to4who (last visited 15 November 2018)
7 The English translation of the amended Act on the Protection of Personal Information isavailable at https://tinyurl.com/ydaphnxj (last visited 15 November 2018).
8 https://tinyurl.com/y9ozgjot (last visited 15 November 2018).
9 https://tinyurl.com/yaelm62x (last visited 15 November 2018).

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the past six months10 has been canceled; then it is granted to a single independentadministrative authority the role to write the privacy guidelines, while until 2015
many Ministry or independent agencies were granted to issue guidelines about
their proper competences. Approximately forty guidelines regarding personal
information protection have been issued by government agencies including the
Ministry of Health, Labour and Welfare,11 the Japan Financial Services Agency12
and the Ministry of Economy, Trade and Industry.13
The law hasn’t limited itself only to establish the new field of competence of
publics organisms, but it also influenced deeply the personal data notions toguarantee them a more effective protection. Among the most significant
innovations of this law, it is important to remember the widening of the conceptof personal data to comprehend the ‘individual identification code’ (Art 2 para 2),
the introduction of the ‘Special care-required personal information’ concept (Art
2 para 3) to indicate the valid data to gather information about health conditions,racial origins, crime committed and so on and the creation of the ‘Anonymously
processed information’ category (Art 2 para 10) to indicate the revision and theannexation of data without going up again to single personal data.
It is interesting to observe that the new law, according to what established in
2003, lays down the duties of the National Government and of local administrations
as regards the citizens’ privacy protection. First, it established that
‘The central government shall have the responsibilities for comprehensively
developing and implementing necessary measures to ensure the proper
handling of personal information’ (Art 2)
and then it clearly state that
‘The government shall, considering the nature and utilization methodof personal information, take necessary legislative and other action so as tobe able to take discreet action for protecting personal information that
especially requires ensuring the strict implementation of its proper handlingin order to seek enhanced protection of an individual’s rights and interests,
and shall take necessary action in collaboration with the governments in othercountries to construct an internationally conformable system concerning
10 Art 2 of the Order for Enforcement of the Act on the Protection of Personal Information(Cabinet Order 506, 2003, enacted on 10 December 2003).
11 The Guidelines on Protection of Personal Information in the Employment Management(Announcement no 357 of 14 May 2012 by the Ministry of Health, Labour and Welfare).
12 The Guidelines Targeting Financial Sector Pertaining to the Act on the Protection of
Personal Information (Announcement no 63 of 20 November 2009 by the Financial Services
Agency).
13 The Guidelines Targeting Medical and Nursing-Care Sectors Pertaining to the Act on
the Protection of Personal Information (Announcement in April 2017 by the PPC and theMinistry of Health, Labour and Welfare).

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personal information through fostering cooperation with an internationalorganization and other international framework’ (Art 4).
The law also specifies the role and the functions of local authorities in the
personal data management. Thus, Arts 11-13 establish that each local government
shall:- based on the nature of personal information it retains, the purpose ofretaining the personal information, and so on, strive to take necessary action soas to ensure the proper handling of the retained personal information (Art 11
para 1);- in response to the characteristics and business contents of a local
incorporated administrative agency that it has established, strive to take necessary
action so as to ensure the proper handling of personal information that theagency retains (Art 11 para 2);- in order to ensure the proper handling of personal information, strive totake necessary action to support a business operator and a resident in a local
area (Art 12);- in order for a complaint caused between a business operator and a principal
about the handling of personal information to be dealt with appropriately andpromptly, strive to mediate dealing with the complaint and take other necessary
action (Art 13).
Finally, it is establishes as a general standard that central and local
governments cooperate with each other in the implementation of measuresconcerning the protection of personal information (Art 14).
One has to observe that the new law has strengthened the Prime Minister’srole because as until 2017 single Ministries issued their proper guidelines. It
now belongs to Government as a whole to establish‘a basic policy on the protection of personal information in order toseek to comprehensively and integrally promote measures concerning theprotection of personal information’ (Art 7).
Moreover, it is the Cabinet to establish agreements with other Nations aboutdata and information circulation, as well as to give directions and support tolocal administrations. By the same token, it is a Prime Minister’s duty to propose
the adoption of new technical rules, to nominate the President and the membersof the Personal Information Protection Commission.
This Commission is the other news of the 2015 law because it will have areal propulsive role for the privacy theme and it will represent the reference
point both for Government, local authorities and most of all for economic
operators. Its functions are very wide, in fact the Commission:- provides guidance and advices, requests reports, conducts on-site inspections,offers a recommendation and makes orders to governmental institutions and2018]The Public Administration and the Citizens Privacy Protection

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business operators who handle Specific Personal Information, depending on
the issue;- mediates the complaints with regard to the handling of Specific Personal
Information;- announces and promotes the importance of personal information protection,
as well as proper and effective use of personal information;- promotes cooperation with data protection authorities in foreign states;- acridities private organizations, which process complaints on business
operators handling personal information and provide information to them.
The Commission is composed by a chairperson and eight Commission
members, appointed by the Prime Minister with the consent of both Houses of
the Diet. The term of offices of the chairperson and the Commission members isfive years. The chairperson and Commission members exercise their authorities
independently.
While the President and the Vice-President can be chosen freely, the othersix members are chosen based on specific competences acquired in their academic
or working field. The Japanese Legislator’s aim was to permit that the Commission
would have those specific competences necessary to examine privacy problems
with a multidisciplinary view. In fact it comprehend:- A person who has knowledge and experience in the protection and in
appropriate and effective use of personal information- A person who has knowledge and experience in the protection of consumers- A person who has knowledge and experience in information processing
technology- A person who has knowledge and experience in administrative fields usedin specific personal information- A person who has extensive knowledge and wide experience in mattersrelating to the practices of private enterprises- A person recommended by six federations composed of governors, mayors
and presidents of the local councils.
III. The New European Privacy Regulation
In the same period in which Japanese Government started to reform its
privacy regulations, European Union completely updated its own, which dated
back to 1996.
Since the mid-1990s, EU policymakers have adopted a series of data protection
rules that quickly became the de facto global standards for most countries except
for a few holdouts like China, Russia, Japan and the United States.
Before briefly examining the new EU regulation, one has to highlight afundamental difference between the European and the Japanese one. In fact, inJapan the 2015 law not only regulates the basic aspects of the personal data

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management, but it also clearly indicates the competences of the independentadministrational Agency which have to supervise the respect of the rules. By
contrast, in Europe the European Data Protection Supervisor will still have tobe regulated by the 2001 Regulation and not by the General Data Protection
Regulation of 2016. This will require to harmonize the Supervisor figure in thecontext of the new Regulation. The problem is well known, in fact the European
Commission adopted a proposal on 10 January 2017 which repeals Regulation(EC) 45/200114 and brings it into line with the GDPR. The proposal is currently
under discussion in the European Parliament and the Council of the European
Union. Both the ePrivacy15 and Regulation 45/2001 replacement texts should
be adopted in time to become applicable at the same time as the GDPR. With
this comprehensive reform, the EU will have a modern framework for privacy
and data protection.
In light of the above, it is now necessary to analyze the most innovative
aspects of the new Personal Information Protection Regulation.
After four years of preparation and debate the General Data Protection
Regulation (acronym GDPR)16 was finally approved by the EU Parliament on 14
April 2016.
The EU General Data Protection Regulation replaces the Data Protection
Directive 95/46/EC and was designed to harmonize data privacy laws acrossEurope, to protect and to empower all EU citizens data privacy and to reshape
the way organizations across the region approach data privacy. Over the last 25
years, technology transformed lives of European citizen in ways nobody could
have imagined, thereby requiring a review of the old rules. The aim of the GDPR isto protect all EU citizens from privacy and data breaches in an increasingly
14 Regulation (EC) No 45/2001 of the European Parliament and of the Council of 18

December 2000 on the protection of individuals with regard to the processing of personal databy the Community institutions and bodies and on the free movement of such data. For a legal
analysis of this regulation, see K. Runeberg, Balancing the Right to Data Protection and theRight of Access to Documents. A Study of the Conflicts Between Regulation 45/2001 andRegulation 1049/2001, Faculty of Law, Lund University, 2018, avalaible athttps://tinyurl.com/y9q2pq4v (last visited 15 November 2018).
15 Directive 2002/58/EC of the European Parliament and of the Council of 12 July 2002
concerning the processing of personal data and the protection of privacy in the electronic
communications sector (Directive on privacy and electronic communications). For more details,
see L.F. Asscher and S. A. Hoogcarspel, Regulating Spam. A European perspective after the
adoption of the e-Privacy Directive (Berlin: Springer, 2006).
16 There is a considerable body of scientific literature on the GDPR. In particolar, see P.
Voigt and A. von dem Bussche, The EU General Data Protection Regulation (GDPR): A
Practical Guide (Berlin: Springer, 2017); C. Kuner, L.A.Bygrave and C. Docksey, Commentary on
the EU General Data Protection Regulation (Oxford: Oxford University Press, 2018); G. Voss
and K. H. Woodcock, Navigating EU Privacy and Data Protection Laws (Chicago: American
Bar Association, 2016); Paul Lambert, Understanding the New European Data Protection
Rules (Boca Raton: Auerbach Publications, 2017).

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data-driven world that is vastly different from the time in which the 1995 directive
was established.
The GDPR is now recognized as law across the EU and Member States
have two years to ensure that it is fully operational in their countries by May
2018: they must implement the Data Protection Directive for the police andjustice sectors into national legislation. It will be applicable as of 25 May 2018.
It will be applied to the processing of personal data by controllers andprocessors in the EU, regardless of whether the processing takes place in the EU
or not. The GDPR will also apply to the processing of personal data of data
subjects in the EU by a controller or processor not established in the EU, where
the activities relate to: offering goods or services to EU citizens (irrespective ofwhether payment is required) and the monitoring of behaviour that takes place
within the EU. Non-EU businesses processing the data of EU citizens will also
have to appoint a representative in the EU.
Another legislative change concerns the conditions for the consent from thecitizens. Consent must be clear and distinguishable from other matters andprovided in an intelligible and easily accessible form, using clear and plain
language. It must be as easy to withdraw consent as it is to give it.
The GDPR provides the following rights for individuals:
1. The right to be informed (It encompasses an obligation to provide ‘fair
processing information’, typically through a privacy notice. It emphasizes theneed for transparency over how you use personal data. Furthermore that is theright to be informed of a data protection breach)
2. The right of access (everyone have the right to obtain confirmation that
their data is being processed; and access to their personal data; and othersupplementary information)
3. The right to rectification
4. The right to erasure (this right is to enable an individual to request thedeletion or removal of personal data whether there is no compelling reason for
its continued processing)
5. The right to restrict processing (when processing is restricted, you arepermitted to store the personal data, but not further process it. You can retain
just enough information about the individual to ensure that the restriction isrespected in future)
6. The right to data portability (The right to data portability allows individuals
to obtain and to reuse their personal data for their own purposes across different
services. It allows them to move, copy or transfer personal data easily in a safe
and secure way, without hindrance to usability)
7. The right to object, namely right to object to:a) processing based on legitimate interests or the performance of a task in the
public interest/exercise of official authority (including profiling);b) direct marketing (including profiling);

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The Italian Law Journal[Special Issuec) processing for purposes of scientific/historical research and statistics
8. Rights in relation to automated decision-making and profiling because
the new law provides safeguards for individuals against the risk that a potentiallydamaging decision is taken without human intervention.
These rights are guaranteed with the provision of precise obligations for thecontroller. Financial penalties are also provided. The controller must not refuse
to give effect to the rights of a data subject unless the controller cannot identify
the data subject. The controller must use all reasonable efforts to verify theidentity of data subjects. Where the controller has reasonable doubts as to theidentity of the data subject, the controller may request the provision of additional
information necessary to confirm the identity of the data subject, but is not
required to do so.
These are very briefly the novelties concerning the rights protected by theRegulation: it is important to underline that such instrument is extremely complex
and detailed and for this reason it is not possible to summarize it in a few pages.
But here, it will be added the Public Administrations duties of the single members
Nations to make effective the right above quoted. The European Legislator, infact, established that the same duties which are imposed on the economic
operators also apply to Public Administrations. Those are:
1. Data Protection Officer. The GDPR introduces a duty to appoint a Data
Protection Officer (DPO) for a public authority, or for carrying out certain typesof processing activities (Art 37). DPOs give assistance to monitor internal
compliance, to inform and to advise on your data protection obligations, it
provides advice regarding Data Protection Impact Assessments (DPIAs) andacts as a contact point for data subjects and the supervisory authority. The DPO
must be independent, an expert in data protection, adequately resourced, andreported to the highest management level. A DPO can be an existing employee
or externally appointed. In some cases several organizations can appoint a single
DPO among them. DPOs can help to demonstrate compliance and are part ofthe enhanced focus on accountability.
2. Records of processing activities. Art 30 of the GDPR obliges companies
and Public Administration to maintain ‘records of processing activities’. The
processing records serve to ensure transparency with regard to processing
personal data and to provide legal protection for the company. It can support
the company’s data protection officer, as well as the supervisory authority incarrying out their tasks. In accordance with Art 30, para 4, of the GDPR, thecontroller or the processor shall make the record available to the supervisory
authority on request. The processing records also serve as verification, so thecompany can prove to the supervisory authority that the requirements of the
GDPR were fulfilled by the controller.
Part of the general duty of the controller is the cooperation with the supervisory
authority, on request, in the performance of its tasks (Art 31 of the GDPR).

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3. Data protection impact assessment. (Art 35) In order to enhance compliancewith this Regulation where processing operations are likely to result in a highrisk to the rights and freedoms of natural persons, the controller is responsible
for carrying-out a data protection impact assessment to evaluate, in particular,
the origin, nature, particularity and severity of that risk. The outcome of theassessment is taken into account when determining the appropriate measures
to be taken in order to demonstrate that the processing of personal data complies
with this Regulation. When a data-protection impact assessment indicates thatprocessing operations involve a high risk, which the controller cannot mitigate
by appropriate measures in terms of available technology and costs ofimplementation, a consultation of the supervisory authority takes place prior to
the processing.
IV. The Data Transfer Between Japan and EU
Finally, we are going to examine the relationship between EU and Japan.
On July 2017, the European Commission and the Japanese Government
published a joint statement on international transfers of personal data.17 The
statement mentions that the EU and Japan will continue their cooperation andaim by early 2018 to recognize each other as having adequate levels of personal
data protection. If this does indeed occur, it would mean there would be compliant
transfers of personal data between the EU and Japan without the need for
instruments such as standard contractual clauses, binding corporate rules or
privacy certifications.
How explained before, from the technical point of view, is the Japanese
PPC that has to engage in relationships with foreign Authorities which attend to
regulation and transfer of personal information. It is for this reason that since
its assignment in 2016, the Commission has started a worthwhile dialogue with
the European Commission and with the single EU Nations to manage the personal
information transfer and utilization between Japan and Europe. There is, infact, the need to harmonize the Community Regulation and the Japanese one to
make commercial exchange easier that is of fundamental importance for both.
To establish a fundamental framework for mutual and smooth transfers of
personal data between Japan and the EU, in June 2017, the PPC proposed thefollowing criteria to be set forth as amendments to the PPC Rules for designating aforeign country (which is an alternative measure to obtaining the data subject’s
consent for a cross-border transfer of personal data from Japan to a foreigncountry under Art 24 of the APPI):- there are statutory provisions or codes equivalent to those relating to the17 The cross-border flows of personal data are governed by Chapter V of GDPR (arts 43-

50).

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obligations of personal information handling business operators defined underthe APPI, and the policies, procedures and systems to enforce compliance withthese rules can be recognized;- there is an independent personal data protection authority, and the authority
has ensured the necessary enforcement policies, procedures and systems;- the necessity for a foreign country designation can be recognized as inJapan’s national interests.
In February 2018, the Japanese PPC reported on a plan to establish additional
Guidelines being applicable to personal data transferred from the EU to process
it in Japan under the mutual adequacy findings. The PPC recognizes thefollowing major differences between the APPI and the GDPR, and plans toreflect them in the additional Guidelines:- Scope of the data subject’s rights on the retained personal data – the data
subject's rights requesting disclosure, correction, suspension of usage, etc. shallbe given to any personal data transferred from the EU regardless of theduration of the data retention period;- Sensitive data – personal data regarding sex life, sexual orientation, andlabor union membership transferred from the EU shall be treated as equivalentto ‘special care-required personal information’ under the APPI;- Anonymized data – ‘anonymization’ of personal data transferred from the
EU shall mean no one can re-identify a specific individual data subject bydiscarding decryption keys (different from ‘pseudonymization’). Such data is
treated as anonymously processed information under the APPI.18
At the moment, a comprehensive agreement is lacking even, though it islikely to be reached in a few months because it is a cardinal matter fundamental
for both.
V. Conclusions
Pointing out to the European Legislation and the Japanese one, it can benoticed that the fundamental aim is the same: protect individuals from intrusiveness,sometimes really excessive, of economical operators, most of all operating in theNet. If it is right that all laws are perfectible, this statement is more pregnant
when speaking about privacy and informatics security because technology
necessary brings to face aspects until that moment have been unthinkable. The
challenge is not only to have Legislation in the forefront, but also to have a
Public Administration able to utilize tools that new rules grant. For example,
the European Regulation gave two years (2016-18) to State members to bring inline their administrational structures according to Community requirements.
18 Y. Watanabe, ‘Japan EU Data Transfers - Mutual adequacy findings under APPI and
GDPR’ (2018), available at https://tinyurl.com/y8wzmxbg (last visited 15 November 2018).

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Now then, in some cases, like in Italy, time passed uselessly. Actually, the ItalianGovernment approved the measures to actuate the new Community duties onlyin March 2018, two months before the direct enforceability of new dispositions.
This is creating many problems because many administrations, particularly
Cities, are not able to front new requirements. There is also a lack of specificformation for public employees, who will be called to really actuate the Community
Regulation. We are still in ‘work in progress’.

Software and Patent Law:
Reverse Contaminations, Hybridizations and Trends,
Observed Through the Legal Systems of Italy (and the EPC
System), Japan, and the United States
Matteo DragoniAbstract
This article compares how software inventions are protected by patent law in Italy(and the European Patent Convention (EPC) system), United States and Japan. Notwithstanding
said legal systems appear to be so distant one from the other, surprising similarities may
be found. The article describes such findings and attempts to provide an explanation of
the same by looking at the peculiarities of the legal systems involved and how the patent
system itself operates internationally.

I.

Introduction

The legal systems of Japan and Italy have apparently very little in common.
The current Italian legal system, built on ‘Roman law’ (or, to be more accurate,
on a modified and reinterpreted version of the same) and influenced by other
Roman-based legal systems, most notably the French and the German legal
systems, has developed its own legal theories and doctrines since late XIX Century.
Japan, on the contrary, possessed a completely different legal infrastructure
until the second half of the XIX Century, when, in an effort to update its legal
framework, also came in contact with, and was partially shaped by, the French
and the German legal systems of the times. Japan, however, as comparative law
scholars know too well, never really ‘copied’ any of the mentioned legal systems,
but adapted them to its own culture and legal traditions.
Superficially speaking, both Japan and Italy can be classified as ‘civil law’systems, and their legal infrastructure has been somehow shaped by the French
and the German models, although, unsurprisingly, with two radically different
results. The two systems cannot certainly be called ‘similar’, even if similarities,
once again unsurprisingly, may be found.
When it comes to intellectual property rights (IP rights), however, thecommon thought is that it is very difficult not to find any similarities between
PhD in Comparative Intellectual Property Law, University of Macerata; Transatlantic
Technology Law Forum (TTLF) Fellow, Stanford University; Adjunct Professor of Intellectual
Property Law, University of Pavia.

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legal systems, even the most distant ones. Given their immaterial character, IP
rights can be more easily violated (technically, infringed) than many other kindsof ‘property’ rights, especially in the era of Internet, computers, smartphones,
3D printing devices and so on. This is why harmonization efforts began verysoon in the IP rights’ history, especially from the more developed economies ofthe late XIX Century, and never stopped until today. The aim was, and continues
to be, the creation of IP rights which are the same, or at least very similar,
worldwide and that can be easily, cost-efficiently and quickly obtainedinternationally.
As a result of more than one century of harmonization initiatives (andespecially after the adherence to the TRIPs Agreement was set as a condition to
be part of the World Trade Organization (WTO)), IP rights’ basic principles andnorms are indeed very similar in most of the world’s economies. However, despite
the great efforts which have been made to reduce differences between legal
systems, when analyzing how IP rights are applied in practice in specific fields,(superficial) differences are immediately apparent, and warn the comparative
scholar that the harmonization process might not be at such an advanced stage.
At the same time, an in-depth analysis of the said differences from multiple
viewpoints (and especially how the law is applied in court/administrative
offices, interpreted by lawyers/law practitioners, officers and judges but alsotaught and studied by scholars) is necessary in order to ascertain whether weare dealing with real differences, or merely cosmetic ones.
In this paper, I take as an example the patent protection of software
inventions, which is a very narrow and specific field to which the (allegedly)
harmonized IP norms and principles are applied in practice. When dealing with
software patents, the first impression is that, notwithstanding a harmonized
starting point, we have very different results as to how general standards andrequirements are applied. Especially when comparing Japan with Europe (Italy
included) and with the United States.
II. A Legal Protection for Computer Programs
In general, patent protection for computer programs has always been avery debated topic.1 For many years, starting from the sixties, internationalorganizations and some of the most progressive countries of the times debatedover which kind of protection software deserved.
While according to some proposals, computer programs deserved (only)
copyright or patent protection, some others envisaged a sui generis right to1 See P. Kirby, ‘Industrial Property Protection for Software’ 5(2) IIC – International Review

of Industrial Property & Copyright Law, 169 (1974) and J. Drexl, ‘What Is Protected in a
Computer Program?’ IIC – International Review of Industrial Property & Copyright Law Studies,
15 (1994).

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address the specificity of software creations: computer programs are abstractand somehow ‘literary’ in nature, but at the same time characterized by a strong
technical side and a myriad of technical and industrial applications. Copyrightprotection means a protection which is very long-lasting (now in many countries it
lasts for seventy years after the death of the author) but focused on the means ofexpression of the underlying idea and not necessarily requiring any kind of
disclosure of how the software program works. In other words, longer andeasier to obtain (it is granted automatically from the moment of the protected
work’s creation) but for some aspects easier to circumvent, although there might
be the possibility to keep the important parts of software program (eg the sourcecode) secret or partially secret. Patent protection, on the other hand, means a
shorter protection (now maximum twenty years) but a stronger one: a specificproduct or process is protected, and also their ‘equivalents’, and in case of productpatent the protection works independently of how the product is manufactured.
This stronger exclusivity is counterbalanced by the need to file a patent applicationthat at some point becomes public and in which the applicant has to disclose all(or most of) the details about the invention and no protection is granted unless apatent application is made in every State where the protection is sought.
With regard to the sui generis proposals, they were mostly a combination
between copyright and patent protection, usually with a shorter duration thanboth (given the quick obsolescence of software programs).
In the US, a proposal to protect software through patents was submitted tothe attention of the Congress in the early Sixties but the Presidential commissionin charge of its evaluation concluded against such a legislation. Due to theintense lobbying against the patentability of computer programs, other similar
proposals failed. On 12 December 1980 the US Parliament decided to pass theComputer Software Copyright Act, which included software amongst the
copyrightable works: copyright protection was established even if the courts
continued to debate over computer programs’ patentability.2 In Japan, in orderto clear the uncertainties, the Ministry of International Trade and Industry(breviter, MITI) appointed a special Study Committee on Legal Protection ofSoftware, which issued an interim report in 1972. According to the report,
copyright protection was inadequate for software. A year later, the Second
Subcommittee of the Copyright Council set up by the Japanese Agency for
Cultural Affairs submitted a report stating the opposite, ie that copyright law
was the most suitable way to protect software, also because it required minimalchanges to the legislation. After several years of debate, in 1983 the MITI waspresented with another report in which a sui generis legislation to protect
computer software was recommended. However, even if this solution had obtained
a large consensus, under pressure of the US and Europe, and upon suggestion
2 See also J.M. Haynes, ‘Computer Software: Intellectual Property Protection in the UnitedStates and Japan’ 13 John Marshall Journal Computer and Information Law, 245 (1995).

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98of the Sixth Subcommittee of the Copyright Council set up by the Agency for
Cultural Affairs, Japan decided to grant copyright law protection to software.3
With regard to Europe, Italy included, some of the first European decisions
conferred protection only to the visual/graphic effects produced by the software,
which was initially compared to a cinematographic work. Moreover, the approaches
taken vis-à-vis computer programs were very different within the States of theEuropean Communities, which tried to harmonize the entire system with thefirst Software Directive of 1991.4 Pursuant to the Directive‘Member States shall protect computer programs, by copyright, as
literary works within the meaning of the Berne Convention for the Protectionof Literary and Artistic Works. For the purposes of th(e) Directive, the term“computer programs” shall include their preparatory design material’.5
With the clarification that protection shall apply to the expression in any
form of a computer program and that ‘ideas and principles which underlie any
element of a computer program, including those which underlie its interfaces,
are not protected’.6 The only condition which is required for the computer
program to be protected is that ‘it is original in the sense that it is the author’s
own intellectual creation’.7
In the end, copyright protection was largely adopted for software programs
but their patent-eligibility was not categorically excluded. Some States, however,were indeed more prone than others in recognizing software patent-eligibility.
In Europe, Art 52 of the European Patent Convention, which excludes
software per se from patent-eligibility, was read by several national courts –and by the European Patent Office itself – as an indication about ‘what-not-todo’. The United States, on the contrary, from the beginning of the Eighties became
one of the strongest promoters and supporters of software patent-eligibility,
especially if compared to the European Patent Office and Japanese Patent
Office (JPO) very cautious approaches. A few years ago the situation in the
United States radically changed, as an increasing number of scholars started to
criticize such permissive approach,8 and even the courts indirectly acknowledged a3 See, ex multis, R. Arancibia, Intellectual Property Protection for Computer Software –A Comparative Analysis of the United States and Japanese Intellectual Property Regimes,
available at https://tinyurl.com/y6u5h6gr, 2003 (last visited 15 November 2018).
4 See Council Directive 91/250/EC of 14 May 1991 on the legal protection of computer
programs.
5 See Directive 91/250/EC Art 1, para 1.
6 See Directive 91/250/EC Art 1, para 2.
7 See Directive 91/250/EC Art 1, para 3.
8 See, ex multis, C.V. Chien, ‘Reforming Software Patents’ 50 Houston Law Review, 325(2012); E. Goldman, ‘Fixing Software Patents’ Santa Clara University Legal Studies Research,
1-13 (2013). Some authors have even questioned the patent system as an incentive for innovation:
see ex multis L. Larrimore Ouellette, ‘Patentable Subject Matter and Nonpatent Innovation
Incentives’ 1115 UC Irvine Law Review, 5 (2015); C. Shapiro, ‘Navigating the Patent Thicket:

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few distortions in the then current system.
On the contrary, the attitude in Europe (meaning the European Patent
Convention Countries, Italy included) and in Japan also changed in the last few
years, with said legal systems heading towards a still prudent but less conservative
approach towards software patents.
III. Software Patents in Japan
Differently from other legal systems, the Japanese Patent Act (JPA), insteadof stating what cannot be considered as an invention (eg computer programs
per se according to EPC Art 52), tries to positively define what an ‘invention’ is:an invention is ‘a creation of a technical idea utilizing a law of nature’9 As aconsequence, the JPA does not contain a list of ‘excluded subject matters’, ie
matters which cannot be the subject of a patent, but such a list is contained – tothe benefit of the practitioner – in the JPO Guidelines and Handbook.
As opposed to other national or regional experiences in Japan there wereno ‘software specific’ cases until less than a couple of decades ago. A few interestingcases merely dealt with patent-eligibility in general,10 clarifying the basic legal
requirements for an invention to be considered eligible for a patent and referred
to before.11
Although (and probably because) there was no specific case law regarding
software patents, the JPO took up the task to delineate which kind of protection
software inventions deserved, if any.12
The JPO Examination Guidelines of 1976 were the first document to containsome guidance about computer program inventions.13 Such guidelines werequite restrictive: even though they did not preclude patent-eligibility for computer
software in general, they stated that programs themselves and recording media
containing software were denied patent-eligibility.
Those Guidelines were followed by some improved versions in 1993 andCross Licenses, Patent Pools, and Standard Setting’ 1 Innovation Policy and the Economy, 119120 (2000).
9 See Art 2 legge 13 April 1959 no 121.
10 See Tokyo High Court Judgment 25 December 1956, Gyōshū, 7, no 12, 3157, so called
Utility Pole Advertising Method case; Tokyo High Court, 22 December 1970, Hanta, no 260,
334, so called Ionic Toothbrush case; Tokyo High Court, 12 February 1986, Hanrei
Kogyoshoyukenho 2001, at 16, so called Electric Mirror Stand and Full Length Mirror case;and Tokyo High Court, May 26, 1999, no 1997 (Gyo-Ke) 206, Hanji, no 1682, 118, so called
Video Recording Media case.
11 See A. Sako, ‘Patentability of Inventions Incorporating Human Mental Acts (Intellectual
Property High Court, August 26, 2008)’ Intellectual Property Law and Policy Journal, 34 (2011).
12 See H. Sakai, Historical Transition of Computer Program Protection – A Review of
Examination Guidelines over a Quarter Century (Tokyo: Kobundo Publishing Co, 2015), 154-172.
13 See Y. Aita, ‘Legal Protection of Computer Software’, in Id et al eds, Advanced Science
Technology and Intellectual Property Rights (Tokyo: Hatsumei Kyokai, 2001), 117-119.

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1997,14 but the first significant modification to the JPO Guidelines can be traced
back to the year 2000. According to the new Guidelines, an invention expressed
as a sequence of computer processes can be considered as a ‘statutory invention’regardless of the technology field and even if a computer program per se isclaimed.15
In 2002, the Japanese Patent Act was amended and its Art 2 was changed
to add ‘computer programs’ and ‘any other set of information similar to a
program that is designed to be used for computer processing’ to the possible
subjects of ‘product patents’. The reason for this change was to provide a stronger
protection for information technology products.16
Due to this amendment to the JPA, Japan became one of the few States in
the world to explicitly recognize patent protection for computer programs, which
can be even the subject of a so called ‘product patent’ (and not only of a ‘process
patent’).
Starting from the early 2000, a few cases regarding software patents17 were
eventually decided. The JPO guidelines were integrated by the principles set out
in the decisions of the Japanese Supreme Court and of the Tokyo High Court
and, from its creation in 2005, of the Intellectual Property High Court, specialized
in IP disputes.
The first important decision dealing with a software patent is the so called
LSI Simulator case,18 where the Tokyo High Court explicitly stated that even an
algorithm could be patented19 as long as the relationship between the algorithm
and the physical parts of the invention is specified and there is a concreteinteraction between the components.20
Another very interesting decision was rendered in the so called Dental

14 See Intellectual Property Committee of the Industrial Structure Council, Report, 11
December 2001.
15 See Intellectual Property Committee of the Industrial Structure Council, Report, 12
December 2001.
16 See Task Force on Industrial Competitiveness and Intellectual Property, Policy Report,
5 June 2002, 5; Y. Aita, ‘Current State and Remaining Issues of Patent Protection for Computer
Programs’ Jurist, 1303, 138-143 (2005).
17 Or utility models, as in the decision of the Tokyo District Court Judgment, 20 January
2003, Hanji, no 1809, 3/Hanta, no 1114, 145 (the so called Balance Sheet case). See also N.
Nakayama, ‘Industrial Property Law’ 1 Patent Law, 105-106.
18 See Tokyo High Court 21 December 2004, (Gyo-Ke) 188, (2004) Hanji 1891,139.
19 See R. Hirashima, ‘A Note on Patenting Computer Software-related Invention & Assessing
the Requirement “Utilizing a Law of Nature” Under the Japanese Patent Law – Something
Like “the Suggestion” from LSI Simulator Case’ 20 Intellectual Property Law and Policy Journal,
65-94 (2008).
20 See N. Mizutani, Technical Scope of a Software-Related Invention Described in Functional
Claims, Commemoration of the Retirement of Prof. Toshiaki Iimura (Toyko: Japan Institutefor Promoting Invention and Innovation, 2015), 517-533. See also Id, ‘Determination as toWhether the Laws of Nature Were Used to Make a Software-Related Invention’ 20 Intellectual
Property Law and Policy Journal, 77 (2008).

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Treatment case,21 decided in 2008 by the Tokyo IP High Court and concerning‘an interactive network for dental treatment’.22 While the High Court concededthat mental activity itself cannot be considered as a statutory invention, it also
stated that all technical means have some connections to mental activities ofhuman beings ‘as all technical means are created by human beings, assisting,facilitating or replacing human beings’ activities including their mental activities’.23
Therefore, unless‘the essential nature of the invention (…) is directed to a human being’s
mental activities (…) patentability of such invention should not be denied
on the grounds of not being considered as an “invention” within themeaning defined in the Patent Act’.24
In Knowledge Base System,25 a case decided a few years after Dental
Treatment, the IP High Court clarifies what ‘essential nature of the invention’means. According to the Court, when the ‘hardware’ components mentioned ina patent application are generic computers or recording media and their specificinteraction with the underlying software or database is not clear, the ‘technicalsignificance’ of the structure described in the patent application is meaningless.
In such a case, the invention was considered as merely reciting abstract concepts
linked with general computers, and therefore, even when analyzed as a whole, itdoes not contain any creation of technical ideas using the laws of nature, butmere abstract concepts, as such unpatentable. This also means that there must
be a meaningful interaction between hardware and software components whichcannot be reduced to the mention of some physical components in the patent inorder to quickly pass the patent-eligibility threshold.26
After Dental Treatment, and before and after Knowledge Base System, a
few other relevant decisions27 followed, without however introducing any new
or fundamental concepts that required any amendments in the JPO Guidelines.
Finally, it is worth mentioning that the Examination Guidelines also point

21 See also Intellectual Property High Court 29 February 2008, Hanji, no 2012, 97, 2007
(Gyo-Ke) 10239.
22 See Intellectual Property High Court 24 June 2008, 2007 (Gyo-Ke) 10369.
23 ibid 25-26.
24 ibid 26.
25 See Tokyo IP High Court, 24 September 2014, (Gyo-Ke) 10014 (2014).
26 See JPO Examination Handbook, Annex B, 14.
27 See Intellectual Property High Court 26 August 2008, Hanji, no 2041, 124/Hanta no1296, 263, (Gyo-Ke) 10001 (2008); Intellectual Property High Court of 16 June 2009, Hanji, no2064 (so called Amusement Machine case) as explained in A. Sako, ‘Patentability of Inventions
Incorporating Human Mental Acts (Intellectual Property High Court, August 26, 2008)’ n 11
above, fns 55 and 56; Tokyo IP High Court 5 December 2012, (Gyo-Ke) 10134 (so called Energy
Saving Action Sheet) (2012); Tokyo IP High Court 24 February 2016, (Gyo-Ke) 10130 (Energy
Saving Action Sheet II) (2015).

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102out, in line with the case law,28 that in assessing patent-eligibility‘the invention should be viewed as a whole, [and that] it is inappropriate
to identify the claimed invention separating the aspect of artificial
arrangement and that of automation technique’.29
As a consequence, the most important part of software patents examination
becomes the analysis of the inventive step of the invention,30 ie whether theinvention is obvious or not to the expert in the field of the invention.
In Japan, also at this stage, the invention is considered and assessed ‘as awhole’, ie without artificially severing the inventive parts from the non-inventive
parts and, most importantly, without separating technical from non-technicalelements.
The above implies that, for instance, just changing the data that are processedby software is likely to be considered as lacking inventive step, because theunderlying program and the interaction between computer program and themachine are exactly the same.
However, if a new mathematical formula implemented by a computer process
were to create, as a result, a new and non-obvious process, under the Japanese
law this could be a patent-eligible invention and, if as a whole the process were
to be found new and inventive, such invention could be considered patentable.
Such invention would probably have a harder time in being awarded a patent in
the EPO system, Italy included, or in the current US system.
IV. Software Patents in the European Patent Convention System
When dealing with software patenting in Europe,31 we must start from Art
52 para 1 EPC, according to which patents‘shall be granted for any inventions which are susceptible of industrial
application, which are new and which involve an inventive step’.
So, first of all, patent-eligibility requires an invention. However, the term
‘invention’, differently from the Japanese legal system, is not positively describedwithin the EPC, which contains only a ‘negative’ definition. According to Art 52
para 2 EPC, discoveries, scientific theories, mathematical methods, aesthetic
28 See ex multis Intellectual Property High Court 24 June 2008, (Gyo-Ke) 10369 (2007).
See Intellectual Property High Court 26 September 2006, (Gyo-Ke), 10698 (2005).
29 See also JPO Guidelines for Examination, chapter 2.2.
30 See for instance one of the last decisions involving software patents, Intellectual Property
High Court 6 August 2015, (Gyo-Ke) 10231 (2014), where the claimed invention was found to
be lacking an inventive step.
31 With specific reference to the States which are part to the European Patent Convention(EPC) and the case law of the European Patent Office (EPO) established under the said treaty.

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creations, schemes, rules and methods for performing mental acts, playing gamesor doing business, presentations of information and programs for computers
are not regarded as inventions.
The above-mentioned exclusion, however, is not as absolute as it might
seem, since Art 52 para 3 EPC clarifies that it is limited only to patent applications
directed to computer programs ‘as such’.32
Therefore, since a computer program per se seemed to be excluded frompatentability, the analysis of the EPO Technical Boards and Boards of Appeal(BoAs)33 was focused on distinguishing a patent-eligible software-related invention
from a patent-ineligible one and then on trying to understand when a patenteligible software invention is then patentable (ie new, inventive and industriallyapplicable).
The BoAs’ case law initially followed two different general approaches withregard to patent-eligibility: the contribution approach and the whole-content
approach. Eventually, only one of them was chosen as the most appropriate andan evolution of the same became the standard.34
According to the so called ‘contribution approach’, patent-eligibility isestablished after a prima facie examination of the (alleged) invention’s inventiveness:the invention is inherently patentable when the invention’s contribution to theart is technical and it is not limited to a subject-matter excluded from patentability(which in the case of the EPC includes software per se, algorithms, etc).35
According to said approach the invention is not examined ‘as a whole’ todetermine the patent-eligibility, but the ‘inventive part’ of the (alleged) invention
is somehow severed from the initial ‘whole’ and analyzed separately. If what
32 See R.M. Hilty and C. Geiger, ‘Patenting Software? A Judicial and Socio-Economic
Analysis’ IIC – International Review of Intellectual Property and Competition Law, 623 (2005);
E. Arezzo, Tutela brevettuale e autoriale dei programmi per elaboratore: profili e critica di
una dicotomia normativa (Milano: Giuffrè, 2012), 236.
33 The EPO not only administers the examination of patent applications (which can be
granted or rejected), but it is also equipped with a very functional system of appeal of theexaminers’ decisions. Both the decisions granting a patent or rejecting a patent application canbe opposed in front of a Technical Board and the decision of the Technical Board can beappealed in front of a Board of Appeal.
34 See P. Van den Berg, ‘Patentability of Computer-software-related Inventions’, in Membersof the Enlarged Board of Appeal of the EPO ed, The Law and Practice of the Enlarged Boardof Appeal of the European Patent Office During Its First Ten Years (Cologne: Carl Heymanns
Verlag, 1996), 33.
35 See generally J. Pila, ‘Dispute over the Meaning of “Invention” in Article 52(2) EPC –The patentability of computer-implemented inventions in Europe’ 36 IIC – International Review
of Industrial Property and Copyright Law, 173-191 (2005). See G.D. Kolle, ‘Patentability ofSoftware-Related Inventions in Europe’ IIC – International Review of Industrial Property and
Copyright Law, 660 (1991) and J. Drexl, ‘What Is Protected in a Computer Program? CopyrightProtection in the United States and Europe’ IIC– International Review of Intellectual Property andCompetition Law Studies, 15 (1994); G. Guglielmetti, ‘Brevettabilità delle invenzioni concernenti
software nella giurisprudenza della Commissione di ricorso dell’Ufficio europeo dei brevetti’
Rivista di Diritto Industriale, II, 358 (1994); Id, L’invenzione di software. Brevetto e diritto
d’autore (Milano: Giuffrè, 1996).

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seems to be the inventive part is made up only by excluded subject matter (orconstituted an advancement in an excluded category), like computer programs,
the invention is not patent-eligible.
Such analysis is carried out at the patent-eligibility stage, therefore before
analyzing whether the invention is new, inventive and industrially applicable(and sufficiently described).
On the contrary, according to the ‘whole content approach’, in order toverify whether the invention is patent-eligible or not, the ‘whole content’ of theinvention must be taken into consideration, without splitting it into inventive
and non-inventive parts.
If the ‘whole’ invention is patent-eligible because it does not fall into one of
the excluded categories, then the patentability analysis must be carried out. As aconsequence of this approach, if the invention is a mix of technical and nontechnical elements, the patent-eligibility test is rapidly passed, because theinvention could hardly be considered ‘a computer program per se’, ‘a mathematicalformula as such’, etc.
However, the issue of excluded subject matter is not solved with this firstassessment, but it revives when considering the criteria of patentability (novelty,
inventive step and industrial applicability), and in particular the inventive step.
The invention is inventive, and thus patentable, if it is the solution of technicalproblems or technical means are used to achieve such a solution and thecontribution to the art pertains to a field non-excluded from patentability, ie atechnical one.
The EPO Technical Boards followed this second approach in several decisions,36
alternating it to the above-described ‘contribution approach’. At some point, the‘contribution approach’ was slowly abandoned by the Boards,37 even thoughsometimes a revival of the same could be discerned in some decisions.38
Starting from 2006, the BoAs began adopting a slightly different approach,39
by recognizing that some technical means were enough to confer ‘technicalcharacter’ to software-related inventions, therefore making the patent-eligibility
phase almost useless. This new line of decisions40 has been referred to as ‘any
36 See for example T 0208/84 Vicom/Computer-related Invention; T 26/86 Koch &Sterzel/X-Ray Apparatus; T 115/85 IBM/Computer-Related Invention; KEARNEY/ComputerRelated Invention, T 0042/87; T 236/91 TEXAS INSTRUMENTS/Language Understanding
System; T 164/92 Computer Components/Bosch, etc. See also D. Schiuma, ‘TRIPS and Exclusionof Software “as such” from Patentability’ IIC – International Review of Industrial Property
and Copyright Law, 1 (2000).
37 See for example T 1173/97, Computer Program Product/IBM; T 1194/97, PHILIPS/Record
Carrier; T 931/95, PBS Partnership/Controlling Pension Benefits System, etc.
38 See P. Leith, Software and Patents in Europe (Cambridge: Cambridge University Press,
2007).
39 See T 258/03, Auction Method/HITACHI; T 424/03, Clipboards formats I/Microsoft;
T 154/04, DUNS LICENSING ASSOCIATES/Estimating Sales Activities.
40 But especially T 424/03, Clipboards formats I/Microsoft.

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hardware approach’, since the mentioning of any hardware next to a computer
software was enough to make the ‘whole’ invention patent-eligible and quickly
go to the patentability analysis.
The EPO Enlarged Board of Appeal, which is a special composition of the
BoA that addresses very specific and delicate matter concerning the applicationof the EPC, 41 clarified in 2010 that a computer program, in order to bepatentable, has to generate ‘further technical effects’, but those effects do nothave to be new or inventive (such analysis will be left to the subsequent
inventive step and novelty assessments). In doing such statement, the Enlarged
Board of Appeals confirmed that tying the software to ‘any hardware’ is notenough if in the end the software is claimed as the only invention in the patent.
However, if something else containing the software is claimed, for instance a‘storage medium’, there is no patent-eligibility issue there. Since ‘storage media’per se are not excluded from patentability, the analysis will immediately befocused on the patentability requirements.42
The Enlarged Board of Appeal clarifies that during the patentability analysis
all the elements of the invention have to be taken into account, not only thetechnical/non-excluded ones. In fact, also matters excluded from patentability may
nonetheless contribute to the technical character of the invention.43
The EBA’s teachings were followed in the subsequent decisions of theTechnical Boards and are still followed today.44 They have also been incorporated
in the EPO Guidelines for Examination, whose last version became binding
starting from 1 November 2017.45
V. Software Patents in the United States
United States’ statutory law, unlike the EPC and Italy but similarly to Japan,
never contained an explicit list of ‘excluded subject matters’, ie categories ofinventions (or ‘non-inventions’) that are excluded from patentability. As aconsequence, in the US there was no explicit exclusion of ‘software patents’ fromthe scope of the Patent Act. However, a less specific (if compared to the EPC) listof ‘excluded categories’ has been created through a series of judicial precedents.
41 See G 03/08.
42 See G 03/08, 38-39 at 10.8.7.
43 See J. Pila, ‘Software Patents, Separation of Powers, and Failed Syllogism: A Cornucopia
from the Enlarged Board of Appeal of the European Patent Office’ Cambridge Law Journal,
70 (2011). See also Id, The Requirement for an Invention in Patent Law (Oxford: Oxford
University Press, 2010).
44 See ex multis T 0313/10 Item matching/AMAZON; T 0573/12, Automated process
flow/SAP; T 1755/10, Software structure/Trilogy; T 1385/12; T 1370/ 11, On-demand propertysystem/Microsoft; T 1789/11, Clipboard formats I/Microsoft; T 1463/11 Universal Merchant
Platform/Cardinal Commerce.
45 See EPO, Guidelines for Examination, 2017.

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US courts, through a series of decisions interpreting the US Patent Act andin particular USC 35 para 101, began to exclude ‘abstract ideas, natural phenomena
or natural laws’ from the scope of patentable subject matter.46
In order to have some judicial precedents dealing specifically with software
patents47 we have to wait until the Seventies. The first one is Gottschalk v
Benson,48 which involved a method for converting binary-coded decimals into
pure binary numerals. The US Supreme Court found that the invention was not
related to any particular machine or apparatus, art or technology, but it wasnothing more than a mathematical calculation that could be performed mentallyby humans without the help of any machine, and therefore not patent-eligible.
A second relevant case is Parker v Flook,49 where the Supreme Court stroke
down another software invention because in the opinion of the Supreme Court
the algorithm was the only new and useful characteristic of the invention, which
per se was not patent-eligible and had to be considered as part of the prior art asa mere mathematical, abstract, discovery.
For a slight change of course from this more restrictive approach, we haveto wait another couple of years with Diamond v Chakrabarty50 and, with specificregard to software, the Supreme Court showed a more permissive approach
towards its patent-eligibility in Diamond v Diehr.51 In dealing with the patent at
issue, the justices in Diehr found that, since the patent at hand involved physicaland chemical processes for molding precision synthetic rubber products, it fellwithin the categories of patentable subject matter52 and such conclusion could
not be altered by the fact that in several steps of the process a mathematicalequation and a programmed digital computer were used.53
The Diehr decision is interesting also from another point of view: While inEurope the contribution approach and the whole content approach were being
conceived, the US Supreme Court immediately intervened to clarify a similar
matter. The majority of the justices in Diamond v Diehr stated that‘in determining the eligibility of respondents’ claimed process for patent
protection under para 101, their claims must be considered as a whole. It is
46 See O’Reilly v Morse 56 US (15 How) 62, 131 (1853).
47 See M. Campbell-Kelly, ‘Not All Bad: An Historical Perspective on Software Patents’ 11

Michigan Telecommunications and Technology Law Review, 191 (2005), and E.R. Hyde,‘Legal Protection of Computer Software’ 59 Connecticut Bar Journal, 298, 302-303 (1985).
48 See Gottschalk v Benson 409 US 63 (1972), no 71-485. See also M.A. Duggan, ‘Patents
on Programs? The Supreme Court Says No’ 13 Jurimetrics Journal, 135 (1973).
49 See Parker v Flook 437 US 584 (1978).
50 See Diamond v Chakrabarty 447 US 303 (1980).
51 See Diamond v Diehr 450 US 175 (1981). See also, for different points of view, J.E.
Cohen, M.A. Lemley, ‘Patent Scope and Innovation in the Software Industry’ 89 California
Law Review, 1, 9 (2001) and K.E. Collins, ‘Propertizing Thought’ 60 Southern Methodist
University Law Review, 317 (2007).
52 Diamond v Diehr, n 51 above, 185.
53 ibid 188-189.

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inappropriate to dissect the claims into old and new elements and then toignore the presence of the old elements in the analysis (…)’.
After Diehr, the Supreme Court did not hear any other patent-eligibility caseuntil 2010. It was the Court of Appeal for the Federal Circuit (CAFC, or ‘Federal
Circuit’) that adopted Diehr’s more permissive approach towards patent-eligibility
and developed it even further. The landmark case that has been regarded as thefirst real opening to software patent-eligibility is State Street Bank & Trust Co v
Signature Financial Group, Inc.54 In this decision, the CAFC clarified that some
types of subject matter, standing alone, represent no more than abstract ideas
unless they are reduced to a practical application. Even an algorithm, in itself
patent-ineligible, can become eligible if applied in a ‘useful’ way. In State Street
the Federal Circuit held that the transformation of data, through a machine
governed by an algorithm, into other data (amounts of dollar into final shareprices) can be seen as the practical application of a mathematical formula, which
produces a ‘useful, concrete and tangible result’.55 Such an invention is therefore
patent-eligible.
Between 2010 and 2014, a trilogy of Supreme Court decisions changed
completely the landscape of patent-eligibility in the United States.56
The first decision is Bilski v Kappos (2010), where the Supreme Court
began demolishing the existing system by questioning the validity of both State
Street’s ‘useful, concrete and tangible result’ test and the older ‘machine-ortransformation’ test,57 however slightly mixing patent-eligibility criteria (naturallaws, natural phenomena and abstract ideas) with some of the patentability
concepts: the invention is not considered ‘as a whole’ when determining its
patent-eligibility but what seems to be the novel/non-obvious part is severed
54 See State Street Bank & Trust Co v Signature Financial Group, Inc, 149 F.3d 1368, 47
U.S.P.Q.2d 1596 (Fed Cir 1998).
55 See J.R. Allison and S.D. Hunter, ‘On the Feasibility of Improving Patent Quality One
Technology at a Time: The Case of Business Methods’ 21 Berkeley Technology Law Journal,
729, 730-31 (2006); J.E. Cohen and M.A. Lemley, ‘Patent Scope and Innovation in the Software
Industry’ 89 California Law Review, 46 (2001).
56 See J.F. Duffy, ‘Rules and Standards on the Forefront of Patentability’ 51 William &Mary Law Review, 609, 612 (2009). See also M.A. Lemley, ‘Software Patents and the Returnof Functional Claiming’ Wisconsin Law Review, 905 (2013); A. Bhattacharayya, ‘Implementation,or the Possible Lack Thereof, of the Bilski Supreme Court Decision’ 6 Journal of Business andTechnology Law, 103 (2011); M.A. Lemley, ‘Ignoring Patents’ Michigan State Law Review, 1921 (2008).
57 See Bilski v Kappos, 561 U.S. 593. See also P.S. Menell, ‘Forty Years of Wondering in
the Wilderness and No Closer to the Promised Land: Bilski’s Superficial Textualism and theMissed Opportunity to Return Patent Law to Its Technological Mooring’ 63 Stanford Law
Review, 1289 (2011); M.A. Lemley et al, ‘Life After Bilski’ 63 Stanford Law Review, 1315 (2011);
P. Samuelson and J. Schultz, ‘Clues for Determining Whether Business Methods and Service
Innovations Are Unpatentable Abstract Ideas’ 15 Lewis & Clark Law Review, 109 (2011); D.
Crouch and R.P. Merges, ‘Operating Efficiently Post-Bilski by Ordering Patent Doctrine
Decision-Making’ 25 Berkeley Technology Law Journal, 1673 (2010).

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108from the rest, and evaluated separately.
The second case about patent-eligibility is Mayo Collaborative Services v
Prometheus Laboratories,58 which was about a method to identify the correct
dosage of a medicine to administer to patients that the Supreme Court found to
be a mere attempt to secure a patent on a natural law. Interestingly, the Supreme
Court also admitted that the para 102 novelty enquiry might sometimes overlap
with the para 101 patent-eligibility analysis, but that this is not a good reason toeliminate the para 101 investigation entirely in favor of a ‘patentability-oriented’approach.
The third relevant case about patent-eligibility, Alice Corporation v CLS
Bank International,59 involved four patents regarding an automated platform
for mitigating settlement risk. The Supreme Court, attempting to clarify its past
approaches, created a new two-step test:‘First, we determine whether the claims at issue are directed to one ofthose patent-ineligible concepts. If so, we then ask, “(w)hat else is there in
the claims before us?” To answer that question, we consider the elementsof each claim both individually and “as an ordered combination” to determine
whether the additional elements “transform the nature of the claim” into apatent-eligible application. We have described step two of this analysis as asearch for an “inventive concept” – ie, an element or combination of elementsthat is “sufficient to ensure that the patent in practice amounts to significantly
more than a patent upon the (ineligible concept) itself” ’.60
Following this test, the Supreme Courts intended to reject any sort of ‘any
hardware approach’, clarifying that the interaction of software with physicalcomponents is not enough, by itself, to make an invention patent-eligible.61
After Alice was decided by the Supreme Court, the United States witnesseda tremendous increase in software patents’ invalidations, both at the district
court level and at the appeal (Federal Circuit) level.62 Such a trend started to be
seen in a less ‘pessimistic’ way after the opinion of the CAFC in DDR Holdings,
LLC v Hotels.com63 and seemed to decrease starting from 2016, when threecases about software-related inventions were decided in favor of the patentee:

58 See Mayo Collaborative Services v Prometheus Laboratories, Inc, 566 US 66 (2012).

See also R.S. Eisenberg, ‘Prometheus Rebound: Diagnostics, Nature, and Mathematical Algorithms’
341 Yale Law Journal Online, 122 (2013).
59 See Alice Corp. Pty Ltd. v CLS Bank Int’l, 134 S.Ct 2347 (2014).
60 134 S.Ct. 2347, 7 (2014), page 7 of the decision.
61 134 S.Ct. 2347, 15-16 (2014), pages 15 and 16 in particular.
62 See generally R.R. Sachs, ‘Two Years After Alice: A Survey of the Impact of a “Minor
Case” ’ I (2016) and, for some statistics, available at https://tinyurl.com/nfbs9ya (last visited 15
November 2018).
63 DDR Holdings, LLC v Hotels.com, L.P., 773 F.3d 1245, 1255 (Fed Cir 2014).

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Enfish, LLC v Microsoft Corporation,64 Bascom Global Internet Services,65 Inc
v AT&T Mobility LLC and McRO Inc v Bandai Namco Games America Inc.66
Such ‘opening’, however, was not the beginning of a new golden era for software
patens, the majority of which, during the course of 2017, has been declaredineligible,67 with only two cases68 where patents concerning computer software
managed to pass successfully Alice’s two-step test at the appellate level (CAFC),and namely: i) Trading Technologies International Inc v CQG, Inc69 and Visual
Memory LLC v Nvidia Corp.70
In other words, there seem to be no bright-line rule regarding patenteligibility of software patents, but it is clear that the patent-eligibility analysis isextensively used by US Courts as a mean to judge (and often invalidate) patents.
Finally, once the patent-eligibility test is passed, the next steps are novelty
and non-obviousness, which are not analyzed very differently from what thepatent law and the United States Patent and Trademark Office (USPTO) guidelines
instruct. The real hurdle for software patents is now the patent-eligibility phase.
VI. Software Patents in Italy
Having now briefly summarized how the EPC system, Japan and UnitedStates address software patent-eligibility and patentability (with only somereferences here and there to the Italian legal system), it is interesting to see
whether and how Italy has dealt with such legal issues.
Since Italy is an EPC member State, it is not surprising that the Country has
been strongly influenced by the EPO’s case law and examination practices,notwithstanding the Italian judiciary remains independent and has to follow
the EPC as far as it has been incorporated into Italian law.
64 Enfish, LLC v Microsoft Corp, 2016 US App LEXIS 8699, 2016 WL 2756255 (Fed Cir

12 May 2016).
65 BASCOM Global Internet Services, Inc. v AT&T Mobility LLC, no 15-1763 (Fed Cir 27
June 2016).
66 McRO, Inc. v Bandai Namco Games America, Inc., no 15-1080 (Fed Cir 13 September2016).
67 See for example Intellectual Ventures I LLC v Erie Indemnity Co CAFC Appeals nos
2016-1128 and 2016-1132 (7 March 2017); Intellectual Ventures I LLC v Capital One Financial
Corp, CAFC Appeal no 2016-1077; Return Mail, Inc. v United States Postal Service, CAFC
Appeal no 16-1502 (28 August 2017); Secured Mail Solutions LLC v Universal Wilde, Inc,CAFC Appeal no 2016-1728 (16 October 2017); Smart Systems Innovations, LLC v Chicago
Transit Authority, CAFC Appeal no 2016-1233 (18 October 2017). See also, although nonprecedential and amongst many non-precedential cases, Clarilogic, Inc v FormFree Holdings
Corp, no 2016-1781 (5 March 2017).
68 Or three, if we also consider the case Thales Visionix Inc. v US, 850 F.3d 1343, 121
U.S.P.Q.2d 1898 (Fed Cir 2017).
69 Trading Technologies International Inc v CQG, Inc, CAFC Appeal no 2016-1616 (18January 2017).
70 Visual Memory LLC v Nvidia Corp, CAFC Appeal no 16-2254 (15 August 2017).

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One would expect that, similarly to the UK, where software patent-eligibility
has been the subject of debate multiple times in national courts (especially before
the referral to the EBA of the EPO aimed at clarifying the matter and mentioned
above), also in the Italian case law software’s patent-eligibility and patentability
have been highly debated. By analyzing said Italian case law, however, one soon
discovers that after the EPO became operational, no relevant case regarding
software patents can be found in Italy.71 When software patents cases have been
decided, no issues specifically relating to the peculiarities of software inventions’patentability and patent-eligibility have arisen or anyway no position is taken
regarding them by the judges deciding the case.
It is not so easy to give an explanation to this phenomenon. One might bethat since the Italian Patent Office did not carry out any kind of substantive patentexamination until 2010, Italian patents had very little value, and patent litigation
was mostly done in other jurisdictions (Germany, UK, etc) or directly at the EPOlevel through its opposition and appeal mechanisms. Another explanation might
be that the Italian market is less strategical than others (independently of thestrength of the national patents), so that big software litigations were started inother more crucial countries (once again Germany, UK, France, etc) but not in
Italy.
Another possible explanation might be that in Italy, during court proceedings,
much of the work, when it comes down to patents, is demanded to the courtappointed expert which interacts with the party-appointed experts. As a result,with specific concern to technical matters, it is not infrequent for the Italianjudge (which has no technical background) to rely on the court-appointed expert’s
determination. Therefore, the judge (and the resulting decision) might not divedeep into the details of patent-eligibility and patentability of a software invention
even when those issues arise because: 1) sometimes technical issues arise andare solved during the technical investigation phase; 2) connected to number 1),
and given that anyway the lawyers know that there will be a technical ‘phase’ ofthe judgment where technical matters will be discussed, it is also common
practice not to use and explain in detail all the arguments in the initial briefs
and leave the matter (and some arguments) to the technical experts. As aconsequence, it might not be so surprising to find out that decisions do not makereference to software’s peculiar aspects.
One other possible explanation of the above paucity of Italian case law
regarding software patents may also derive from the fact that Italian judges arevery reluctant to decide differently from what the EPO has decided (especiallyafter opposition proceedings and subsequent appeal have taken place). This
71 In 1981, when the EPO was just becoming operational, the Italian Supreme Court decided

a case regarding broadly-speaking, software patents, but without dealing with the specificities
of software inventions highlighted before: Corte di Cassazione 14 May 1981 no 3169, availableat www.dejure.it.

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also means that once the matter has been settled at the EPO level, in case ofEuropean patent validated in Italy, the case can be considered almost decided
also for Italy, except when the EPO decision was dependent on procedural
aspects which might differ between the two systems (eg which kind of evidence
is considered is not always the same at the EPO and in Italian courts).
Finally, another possible explanation might derive from EPO’s ‘any hardware
approach’, which has made crucial also for software inventions the inventive
step examination phase, where the prior art as a whole comes into play to assess
whether the invention was obvious or not. As a result, it might not be surprisingthat also Italian courts have dealt with the issue as a matter of inventiveness,and it is therefore more likely that software’s specific problems and peculiarities
remain hidden amongst all the other considerations regarding the prior art whichis relevant to assess the presence of an inventive step.
On the practical level, and similarly to Japan, the absence of national guidance
to national software patents cannot be considered, and was never, an obstacle tosoftware patenting. It is true that in Italy there is some sort of reluctance, among
many practitioners, to talk about software patents, but this has not prevented
software patents from being issued in Italy. In some cases it might be true theopposite: patents that would not have survived an EPO examination could survive
in Italy thanks to the absence of a substantive examination at the Italian Patent
Office.
Even now that the EPO is entrusted with the substantive examination of
Italian patents for the Italian Patent Office, the EPO carries out only one
examination, and then sends back a report to the Italian Patent Office, stating
whether according to the EPO the patent should be granted or rejected or how
the patent should be modified in order to be granted. The EPO sticks to thereport in its answer to the patent applicant. The applicant, however, can reply to
the Italian Patent Office (through a patent attorney) and explain why the EPO waswrong in its report on the patent application and also make some amendments,
preferably following at least some of the suggestions given by the EPO. If that
happens, since the answer of the patent applicant to the EPO report does not goback to the EPO but stays with the Italian Patent Office and the Italian Patent
Office is unequipped to respond and evaluate the matter, the patent is usually
granted as proposed by the patent applicant anyway. Hence, the absence of caselaw specifically dealing with software patents does not have a negative impact ofpatent grants or on the patent examination in Italy. The EPO carries out theexamination according to its own guidelines and case law, and absent in Italy asubstantive examination phase, even if there were some national case law about
software patenting, it would be anyway disregarded during the Italian quasiexamination phase.

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VII. Conclusion
Despite the highlighted differences between the legal systems that are here
considered, the result of the investigation is that there are also more similarities
than one could imagine. Whether such, sometimes surprising, similarities are
the product of a fruitful dialogue between patent offices and judges of different
jurisdictions or merely the result of casuistry, is hard to tell. It is certainly truethat patent offices around the world, and especially JPO, EPO and USPTO(along with the Korean and Chinese patent offices), are always following very
carefully what happens in other crucial jurisdictions, so that some contaminations
and influences can be expected. Patent grants, and how strict a patent office’s
examination is, are also matters of policy, and Countries can be more or lessinterested in having weaker, stronger, broader or narrower patents than otherjurisdictions, and they constantly monitor what other patent offices and othernational courts do in order to compete for the most attractive legal system (forinvestments, etc).
Japan, similarly to Italy, had almost no case law regarding software patents
and their patent-eligibility and patentability criteria. Nonetheless both countries
seem to be venues where software inventions can obtain more easily a patent,even if for different reasons. A very liberal, pro-software, patenting approach of
the Japanese legal system, opposed to the absence of a real substantive
examination in Italy.
The ‘essence of the invention’ analysis that is performed by the JPO and by
Japanese courts, on the other hand, is very similar to what happens in the EPC
system (Italy included, for the reasons stated above) during the inventive step
examination phase. The technological problem is found and the means to solve
such a problem are isolated: if such means do not make use of any laws of nature,then the invention is not patentable. This is not very different from what happensin the EPC inventive step analysis: the problem-solution approach (which is themain, although not unique, method for assessing the inventive step) is similarly
applied, with the difference that in Japan novelty and non-obviousness
considerations are usually not made in conjunction with this step, althoughpatent practitioners confirm that there is no clear guidance and they mightsometimes be performed.
With regard to a Europe-US comparison, when the US courts mention the‘inventive concept’, they are reviving some sort of ’contribution approach’ (longabandoned in the US since the eighties), that tries not only to find what the’core’ invention is (the solution to the problem, Japanese style) but also what isreally ‘inventive’ in the invention. In doing so, inventiveness is necessarily taken
into account, mixing patent-eligibility with patentability. The Mayo-Alice approach
looks at the ‘essence’ of the invention, but in a slightly deeper way than theJapanese system does.
Once again, however, the US practice seems very distant from the European

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one but it is not. Applying Mayo-Alice test is not so different from what the
EPO and its boards do when assessing the patentability of the invention, but
without artificially severing the inventive part of the invention before assessing
the patent-eligibility of the same. If some ‘further technical effects’ are producedor, alternatively, some kind of hardware is mentioned, the invention is patenteligible, but if its ‘inventive’/‘non-obvious’ part resides in a non-patentable element,
then the invention cannot be considered to be ‘non-obvious’, because excluded
subject matter as per Art 52 para 2 EPC would dictate so. And the inventive partis evaluated by taking into account only those elements that contribute to thetechnical character of the invention.
In other words, in Europe this separation between ‘inventive’ and ‘noninventive’ occurs at a later stage, but the general criterion used to deal with‘excluded subject matter’ does not seem so different.
In the end, the examination of software inventions is a composite evaluation ofwhat is ‘inventive’ and what patent policy wants to be ‘excluded subject matter’.
Such evaluations take place at different stages: patent-eligibility for US andJapan; inventive step for the EPC system, including Italy.
Despite the apparently radically different approaches, by knowing differences
and similarities of the systems that have been analyzed, a good patent practitioner
is certainly able to draft a patent application in such a way as to maximize thechances of survival of the same patent application in multiple jurisdictions, andat least in Japan, Europe and the United States.

Scientific Evidence and Criminal Proceedings:
The Italian and Japanese Experience
Giuseppe Gennari and Takeshi Matsuda

Abstract
The use of scientific evidence in court raises several problems in both Italian andJapanese jurisdictions. The authors, starting from the problem of admissibility, discuss
two main cases of misuse of scientific evidence: the Amanda Knox case in Italy and the
Ashikaga case in Japan. In both cases the trial court condemned the defendant on thebasis of corrupted science (DNA fingerprint). The authors conclude that a better handlingof this kind of evidence is needed taking into account that errors are inevitable andjudges are not able to evaluate science and its reliability.

I.

The Use of Scientific Evidence in Criminal Courts in Italy

The use of scientific evidence in criminal courts in Italy1 is increasingly
widespread. Beside the ‘old fashioned’ forensic techniques – such as traditional
fingerprint, toolmarks and firearms identification etc – newer technologies are
gaining a fundamental role. Among them we can mention DeoxyriboNucleic
Acid (DNA) fingerprint in its last and more advanced developments. 2 The
increasing reliance on scientific evidence in criminal proceedings poses the
problem of how to assess scientific evidence in court. Judges (and lawyers aswell) should be aware of basic scientific principles and their epistemologicalfoundations in order to make a truly informed use of these new technologies andto avoid uncritical phenomena of ‘science fascination’.
Unfortunately, the reality is quite different.
On the one hand, judges scarcely have any scientific knowledge or education.
Law schools only teach… law. Biology, statistics, physics, physiology are all
subjects foreign to the body of knowledge of jurists. In Italy, judicial training3 isJudge, Court of Milan; PhD in Contract Law, Catholic University of Milan.
Professor of American History, Graduate School of Law and Politics, Osaka University.
1 On this matter G. Gennari, Nuove e vecchie scienze forensi alla prova delle corti(Santarcangelo di Romagna: Maggioli, 2016).
2 The last frontiers are low copy number, highly mixed DNA profiles, phenotypic DNA etc.
3 Judicial training is under the competence of Scuola Superiore della Magistratura (Superiorschool for magistrates). The School organizes several courses each year. Every Judge can apply
for participation in these courses. Participation is not mandatory, nonetheless it is taken into
account during judicial carrier.
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also mainly focused on strictly legal issues (law interpretation, jurisprudence...).
On the other hand, the Italian code of criminal procedure does not provide
any specific rules regarding scientific evidence. When the Italian legislator
adopted the adversarial system in 1988 with a totally new procedural code, the‘expert witness’4 – well known in the American legal system5 – was not introduced.
As a matter of fact, scientific evidence is admissible in court, in conformity withthe general rule of Art 190 of the Italian Code of Criminal Procedure. This meansthat scientific evidence, similarly to any other evidence, is always admissible
upon request of the parties. It can be rejected only when it is manifestly nonrelevant or redundant and this happens only rarely.
Usually, both parties – the defendant and the public prosecutor – appoint
separate experts who prepare, in support of the respective appointing parties’case, a written expert report. The parties then file the reports in court. If thejudge is not satisfied (more often, if he or she cannot decide which is the ‘best’
report), he or she can appoint a court expert in order to obtain a new and impartial
report. As a consequence, there is no preliminary filter on the reliability of scientificassumptions, methods or techniques on which the evidence/report is based; andit marks another great difference with the American legal system based on jury
trial.
Having both a judge and a jury creates a clear division of tasks: the former
to decide what evidence should be considered by the factfinder and the latter tobe the factfinder. The judge plays the role of gatekeeper for the jury. During pretrial hearing he can filter scientific evidence and decide what can be heard by
the jury and what cannot.6

4 Federal Procedural Rule: Rule 702. Testimony by Expert Witnesses.

A witness who is qualified as an expert by knowledge, skill, experience, training, or education
may testify in the form of an opinion or otherwise if:(a) the expert’s scientific, technical, or other specialized knowledge will help the trier offact to understand the evidence or to determine a fact in issue;(b) the testimony is based on sufficient facts or data;(c) the testimony is the product of reliable principles and methods; and(d) the expert has reliably applied the principles and methods to the facts of the case’.
5 Expert testimony must meet a higher standard of reliability than lay testimony. Cf M.J.
Saks and B.A. Spellman, The Psychological Foundations of Evidence Law (New York: NewYork University Press, 2016), 121.
6 Because it is unreliable and misleading for the jury. The standard for the decision is the
Daubert standard (Daubert v Merrell Dow Pharmaceuticals, 509 U.S. 579 (1993)). Scientificevidence is admissible:
Whether the theory or technique employed by the expert is generally accepted in thescientific community;
Whether it has been subjected to peer review and publication;
Whether it can be and has been tested;
Whether the known or potential rate of error is acceptable; andWhether the research was conducted independent of the particular litigation or dependent
on an intention to provide the proposed testimony.

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In Italy there is no jury in criminal as well as in civil proceedings.7 The
professional judge (sitting alone or in a three-judge panel) admits the evidence
and assesses it as well.8
Now, the question is the following: is the Italian system reliable? Can judges
really assess and discriminate good and bad science only on the basis of theexpert reports? Probably not.
Here is one of the most intriguing and (internationally) famous case inwhich the use of scientific evidence became infamous.
II. DNA Low Copy Number in the Legal Context
Meredith Kercher was a young English student at the University of Perugia.9
On 1 November 2007, during the night, she was raped and murdered. After a
few weeks of turbulent investigations, suspects fell on two other students,
Amanda Knox and Raffaele Sollecito. The most important piece of evidence is a
(supposed to be) blood10 stain found on the blade of a knife belonging to Amanda.
DNA from the bio sample is extracted and analysed in order to obtain a profile.
During the debate in court the officer in charge for the forensic laboratory of the
Polizia di Stato (Italian Police) declares a full match with the poor victim’s DNA.
The knife, according to the results of the investigation, was the murder weapon.
That would be hard evidence against the defendants.
Unfortunately, the matter was much more complicated.
The bio sample was so scarce (probably only a few cells)11 that it fell into therealm of ‘DNA low copy number’.
This term is used when the estimated quantity of DNA present in a sample
is less than one hundred-two hundred pg (picograms).12 Consequently, these
7 In Court of Assise (it is the court in charge for murder cases, international terrorism andother few serious crime) there are lay judges (five). Nonetheless, they sit on the bench together
with professional judges (two).
8 Similarly, even in the United States the Daubert standard does not apply in bench trial(trial without a jury). See G. Gennari, ‘I criteri di ammissione della prova scientifica nel contesto
internazionale’, in G. Canzio and L. Luparia eds, Prova scientifica e processo penale (Milano:
CEDAM, 2018), 165-199.
9 This case is widely debated in J. Vuille et al, ‘The Importance of Having a Logical
Framework for Expert Conclusions in Forensic DNA Profiling. Illustrations from the Amanda
Knox Case’, in R.C. Huff and M. Killias eds, Wrongful Convictions & Miscarriages of Justices(New York-London: Routledge, 2013), 8.
10 Because of the very low quantity it is impossible to identify without any doubt thebiological array of the stain.
11 The Forensic Lab did not have the instrument power enough to determine exactly thequantity of DNA. It was surely under nine point ninety-nine picograms (a pictogram is a billionthof a gram) given that the Qubit fluorimeter used by the Police gave a result ‘too low’ and thesensitivity threshold of this instrument is ten picograms.
12 B. Budowle et al, ‘Validity of Low Copy Number Typing and Applications to Forensic
Science’ 50 Croatian Medical Journal, 207-217 (2009); J. Buckleton and D. Taylor, ‘Do Low

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samples may undergo special procedures developed to increase assay sensitivity.
Commonly, this means a greater amount of copying via polymerase chain
reaction with increased PCR cycles (twenty-eight cycles increased to thirty-one
or thirty-four). Thanks to modern PCR kits even a few cells can be analysed for
DNA typing.
The other side of the coin is that the increased number of cycles increases
as well the probability of stochastic effects such as allele drop-in, allele drop-out
and artefacts appearing (stutter). Moreover this technique also increases the risk
posed by contamination of samples. The augmented amplification cycles may
as well amplify even the minimum amount of contaminating traces substantiallyenough to make the final profile disputable or unusable.
Admissibility in court of low copy number is under scrutiny in many
jurisdictions.
English courts usually admit Low Copy Number (LCN) DNA, nonethelessposing some rules13 as stated in the famous ‘trilogy’14 by Lord Justice Thomas.
These rules sound as:- DNA shall always be quantified;- stochastic threshold should be drawn between one hundred and two
hundred pg;- above the threshold DNA profiles should be deemed always reliable and achallenge (in court) to the validity of the method should no longer be permitted;- below the threshold ‘the evidence may properly be adduced and it mustthen be addressed and its weight established by the adversarial forensic
techniques’.15
The Court’s view – in a few words – is that LCN DNA is‘well established to pass the ordinary tests of reliability and relevance(…), in cases where there is clear evidence (adduced in the manner discussed)that the profiles are sufficiently reliable’.16
In the United States admissibility of LCN DNA is still far from being largely
affirmed. In February 2010 an important Frye hearing in the New York State
Supreme Court ruled in favour of admissibility.17 The hearing involved extensive
Template DNA Profiles Have Useful Quantitative Data ?’ 16 Forensic Science International,
13-16 (2015).
13 The same rules and principles are followed in New Zealand (Micahel Scott Wallace v
The Queen, [2010], NZCA 46).
14 They are three decisions from the England and Wales Court of Appeal: Regina v Reedand Garmson, [2009] EWCA Crim, 2698; Regina v Broughton [2010] EWCA Crim 549; Regina
v C, [2010] EWCA Crim 2. In all these cases the presiding judge was Justice Thomas, a wellknown and revered jurist.
15 Regina v Broughton [2010], n 14 above.
16 ibid.
17 The People of the State of New York v Megnath, Ind no 917/2007.

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testimony by scientists from NY OCME (Office of the Chief Medical Examiner)– the governmental agency18 that conducted the genetic analysis – and otherexperts appointed by the defendant. The court, in its final statement, found that‘LCN DNA testing as conducted by the OCME is generally accepted as reliablein the forensic scientific community’. Few years later even a federal court19
confirmed the OCME good fame. Again, LCN was deemed admissible because
OCME adopted long lasting internal validation procedures regarding LCN
through the analysis of more than eight hundred samples.
These decisions are more on the good job done by NY OCME rather than
the general reliability of the LCN method. Changing the laboratory, the outcomechanges too.
In the same period, the federal district court of New Mexico20 rejected expert
witness on LCN after a very conflicted Daubert hearing. This time the DNA
profiling was carried out by the local forensic laboratory (NMDPS). According
to its internal protocols, the stochastic threshold21 for that laboratory was two
hundred fifty pg, whereas the sample analysed in this specific case was two
hundred fifteen pg. The court pointed out that the question‘is not whether it is possible to perform LCN testing reliably – butinstead whether the LCN testing performed in this case, by the NMDPS, isreliable’,and the decision is against the laboratory. They did not have any experiencein the field of LCN – the court says – and they did not demonstrate the competence
to produce results. During the direct examination, the public prosecutor asked
the scientist responsible for the laboratory:‘and for example if you see stochastic effect at one locus, why areothers still reliable’.
The answer is puzzling: ‘just based on my experience’. Personal experience
is not objective and verifiable… it is not science.
In conclusion, LCN still has many twists and turns in the USA.
After all, it is not really important to establish if LCN is admissible or not inGreat Britain, USA or any other country. It is much more important to point out
that there is a strong debate in these countries; in court and among thecommunity of forensic scientists.
18 It is one of the most prominent agencies with a long standing routine use of LCN DNA

technique in the United States.
19 Federal Court for the Southern District of New York, United States v Morgan, 12-cr00223. See also Bronx Supreme Court, People v Garcia, 2013 NY Slip Op. 23053.
20 United States v McCluskey, Cr no 10-2734 JCH, 20 June 2013.
21 The threshold below which the DNA fingerprinting enter in the potential danger zone ofunreliable results.

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III. The Amanda Knox Case and Future Perspectives
In the case of Meredith Kercher, the genetic evidence submitted in court
was undoubtedly problematic. The Italian police had no experience in LCN
analysis, no reliable protocols, and no the possibility to quantify the DNA sample.
The defendants harshly criticized the report filed by the police, explaining thatthe amplification of the sample – the most sensitive phase in LCN – was notrepeated and verified and international standards regarding LCN were notfulfilled. Consequently, they asked the court to appoint a new and independent
expert in order to have a new and impartial report.
The courtrejected the request, and held that a report by a court-appointed
expert would have only added another interpretation (to those of the defendants
and the public prosecutor) and it would not have solved the problem of assessing
which was the correct interpretation in the case.22
The real point is that Italian court was totally unaware of the sharp
international debate rising around LCN. In court’s mind the attack against LCN
performed by the police was nothing but usual defensive arguments. So that it
was just easier to trust more the interpretation offered by the ‘governmentallaboratory’ than the opinion of the ‘private experts’ appointed by the defendants.23
Unfortunately, it was a fatal error.24 And this error was totally clear when the
Court of Appeal25 before and Supreme Court26 after reversed the judgment of
the trial court.
The trial court’s judgement had a large mass media coverage all over theworld. Amanda Knox was an American citizen and this fact transformed a legal
matter into a political dispute. A few months later an international congress on
LCN, with the most prominent American and Italian forensic experts, was heldin Rome. Put simply, the decision aroused a large discussion among scholars
and jurists on how to assess scientific evidence in court and avoid the use ofcorrupted or non-reliable science. It has been proposed that the court should
always appoint an independent expert simply at the request of the parties.27
Others have suggested that the introduction of a ‘daubert standard’ style filter

22 Corte di Assise Perugia 5 December 2009 no 7, available at https://tinyurl.com/yc9tbmjt(last visited 15 November 2018). The defendants where condemned for murder. The sentence
was reversed, after six years, by the Supreme Court (Corte di Cassazione 7 September 2015 no1105, available at https://tinyurl.com/yccjr4wp (last visited 15 November 2018).
23 Very often courts decide on the base of a sort of ‘principle of authority’ and this ‘authority’always falls on the side of the public prosecutor.
24 L. Luparia et al, ‘La prova del DNA nella pronuncia della Cassazione sul caso Amanda
Knox e Raffaele Sollecito’ Diritto penale contemporaneo, 155-161 (2016).
25 Corte di Assise di Appello Perugia 3 October 2011, available at https://tinyurl.com/y7fsldc3(last visited 15 November 2018).
26 Corte di Cassazione 7 September 2015 no 1105, n 22 above.
27 P. Tonini, ‘Dalla perizia prova neutra al contraddittorio sulla scienza’ Diritto penale e
processo, 360 (2011).

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according to which court should admit or assess scientific evidence.28 That
discussion is still going on and probably it will never stop just because there isno magic formula. In order to improve the quality of the decisions involving
scientific issues, it is fundamental to adopt a wholistic approach. The ‘recipe’ should
include: promoting a strong educational training for lawyers and judges on thebasic principles of science and scientific knowledge; disseminating among judges
standards and protocols approved by scientific organizations;29 adopting strategies
in order to prevent cognitive biases during acquisition and assessment of theevidence; promoting a strong selection among experts, binding them to quality
and ethical guidelines; ensure the real independence (from the law enforcement
agencies) of the scientific laboratories. It is a long way to go. Nevertheless it isunavoidable to start working immediately if Italian judicial system wants tomaintain a good degree of credibility on the international stage.
IV. The Use of Scientific Evidence in Criminal Courts in Japan
In Japan, it has long been emphasized that it is important to apply scientificknowledge and new technology not only for investigation but also for factfinding (either against or for the accused) by courts. Especially for the Japanesecriminal justice, under the slogan, ‘from subjective evidence to objective evidence’,scientific evidence has been expected to change the situation in which investigationand fact-finding have depended so much on confession of the accused.
At the same time, it is often warned that it is dangerous to rely on scientificevidence. In fact, there have been several cases of false charge and judgment
caused by scientific evidence. It has been pointed out that the judges are notable to assess substantially or exactly the meaning of the evidence because of its
highly technical character, but on the other hand, are likely to believe thereliability easily because it is ‘scientific’. The competence and impartiality of theexperts have been also disputed.
V. How was Scientific Evidence Handled in the Japanese Criminal
Justice?
Although both the importance and the risks associated with scientific evidence
have been emphasized for a long time, ‘scientific evidence’ has not been clearly
defined. For instance, both DNA fingerprints, blood type tests or polygraphtests, and expert analysis on handwriting, voiceprints, hair identifications or dog
sniff tests are often classified as ‘scientific evidence’. However, the admissibility
28 Corte di Cassazione 17 September 2010 no 43786, available at https://tinyurl.com/y9d76z2c(last visited 15 November 2018).
29 ENFSI (European Network of Forensic Science Institutes) is particularly active in Europe.

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122of this type of evidence is determined on the basis of ‘natural or legal relevancy’
standard, like all the other types of evidence. This might mean that the problems
specific to scientific evidence have not been fully interrogated in Japan.
Art 317 of the Japanese Code of Criminal Procedure provides that ‘facts
shall be found on the basis of evidence’. This provision has been interpreted torequire not only that the court’s fact-finding is based on ‘evidence’, but also thatthe facts are established on the basis of evidence admissible according to theevidential rules provided in the Code of Criminal Procedure, for example,
exclusionary rule of forced confession (Art 319) and hear-say rule (Arts 320328). There are also rules, though not explicitly provided by law, accepted anddeveloped by doctrine and/or case law especially under influence of the US law
and theory, for example, natural and legal relevancy and exclusionary rule ofillegally collected evidence.
The admissibility of scientific evidence, like other types of evidence, isdetermined on the basis of such evidentiary rules. Among the rules governing
the admissibility of evidence, the most relevant and important rule for scientificevidence has been considered to be ‘natural and legal relevancy’. This concept
was introduced in the Japanese theory on criminal procedure under influencesof a theory in the US at that time.30 According to this concept, when evidence
has in its nature no or too little probative value, it has no natural relevancy andis not admissible. For example, simple opinion, reputation, or imagination is
not admissible because it is not empirically or logically relevant to the fact to be
proved. On the other hand, evidence lacks legal relevancy, when it is typicallylikely to entail risks of wrong judgments or unjust prejudice of judges. Evidence
that may produce confusions in issues is also considered to be legally irrelevant.31
The doctrines have long analyzed the admissibility of scientific evidence using
the ‘natural and legal relevancy’ framework. However, they have not sufficiently
examined the problems proper to ‘scientific evidence’ and its definition. Empiricalor logical relevancy or reasonability of inference has been mainly discussed andproper rules to determine ‘scientific evidence’ have not been established. Similarly,
the courts have not been conscious of the problems peculiar to scientific evidence.
Moreover, they seem to have been reluctant to categorically exclude certain typeof scientific (or expert) evidence and tend to reduce the problem to the questionof probative evaluation. In fact, the Supreme Court has affirmed in concrete cases
30 Especially the concept of ‘legal relevancy’ by J.H. Wigmore (J.H. Wigmore, A Treatiseon the Anglo-American System of Evidence in Trials at Common Law (Boston: Little, Brown
and Company, 3rd ed, 1940), 1, 298). See also G. Naruse, ‘Admissibility of Scientific Evidence(1)’ 130(1) Journal of the Jurisprudence Association (Tokyo University), 14 (2013).
31 For example, the Supreme Court denied the admissibility of the evidence on the pastsimilar offense(s) or conduct(s) committed by the accused in order to establish his/her identitywith the author of the offense charged, because it might entail judge’s prejudices on thecriminal inclination or confusion in the hearing SC 7 September 2012, Keishu 66-9, 907; SC 25
February 2013, Keishu 67- 2, 1.

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the admissibility of the result of handwriting analysis,32 polygraph test,33 dog
sniff tests34 etc, though admonishing that the courts shall carefully evaluate theprobative value.35
According to the Japanese code of criminal procedure, courts are considered
to have discretion to decide which evidence is to be examined in trial. In
particular, the court may decide at its discretion if it is necessary or appropriate
to examine a certain document or article of evidence in trial. But it is not
imaginable for courts to deny the necessity to examine scientific evidence thatthe court deems to be relevant to the fact to be proved.
In summary, the standards in order to determine the admissibility or toassess the relevancy and reliability of scientific evidence have not been establishedin Japan.
VI. The Ashikaga Case and DNA Type Analysis
However, as in Italy, the use of a result of DNA type analysis in a concrete
case in Japan as evidence to establish the identity of person who commits acrime and to link the person to the crime has is currently being interrogated. In
particular, the Ashikaga case, in which the accused was convicted on the basis
of DNA type analysis and was incarcerated for seventeen years but foundinnocent in retrial as a result of a new, more advanced DNA type analysis,36
confronted the criminal justice system with the serious problem of ‘scientificevidence’.
In 1990, a missing four-year-old girl was found dead at a riverside in Ashikaga
City, Tochigi Prefecture.37 It was confirmed that she was strangled to death anda lot of sperm was found on her short-sleeves shirt left at the riverside. The next
year Mr Sugaya, a kindergarten bus driver, was arrested and prosecuted of themurder of the girl.38 His arrest was founded mainly on the confession, which
was later found to be false, acquired in the police interview by showing him the32 SC 21 February 1966, Hanrei-jiho 450, 60.
33 SC 8 February 1968, Keishu 22-2, 55.
34 SC 3 March 1987, Keishu 41 -2, 60.
35 Art 318 of the Japanese Code of Criminal Procedure provides that the probative value of

evidence shall be left to the free discretion of the judge, namely does not provide any formal
restriction to the evaluation of evidence. Of course it does not mean that arbitrary evaluation ofevidence is permitted; it shall be empirically and logically ‘reasonable’.
36 For the details of the case, see H. Sato, ‘Report on the Ashikaga Case’ 71 Quarterly
Keiji-Bengo, 25 (2012); K. Honda, ‘The Ashikaga Case of Japan – Y-STR testing used as theexculpatory evidence to free a convicted felon after 17.5 years in prison’ 7 Forensic Science
International: Genetics, 1-2 (2013).
37 Two similar cases occurred in a residential area in 1979, 1984 and 1996 when he wasdetained. This fact would have suggested that the Ashikaga case was a part of serial murders ofyoung girls and Mr Sugaya was not the author. See K. Honda, n 36 above, 2.
38 It is harshly criticized that the police improperly drove Mr Sugaya to confess by showing
the result of incorrect DNA analysis. See H. Sato, n 36 above, 25.

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result of analysis on D1S80 type DNA of the sperm on the victim’s shirt conductedby the National Research Institute of Police Science (NRIPS).
According to the NRIPS report, both the sperm on the victim’s shirt and Mr
Sugaya had sixteen-twenty-six (D1S80 type DNA) and B (ABO blood typing).
However, as to the D1S80 typing method, a serious scientific problem waspointed out after the result of the original DNA test was submitted to the court.
Responding to it, the NRIPS changed the original typing and revised the resultsfrom sixteen-twenty-six to eighteen-thirty during trial. However the NRIPS
insisted the DNA type of the sperm was the same as that of Mr Sugaya.
In trial of the first and second instance, the admissibility and reliability of
the result of analysis on the DNA type became an issue. However, the court of
the first instance, Utsunomiya District Court, admitted the evidence and convicted
Mr Sugaya. The accused appealed, but the court of the second instance, Tokyo
High Court rejected it. The court defined scientific evidence as a result of theinspection and analysis by means or methods that are beyond the one bynormal senses on a certain phenomena or action. The court held that in order toadmit such scientific evidence in criminal trial, not only the fundamental
principles of the analysis shall be founded scientifically but also the means or
methods shall be appropriate and typically reliable. As a result, the court affirmed
the admissibility of the NRIPS report on the Mr Sugaya’s DNA fingerprints.39
The Supreme Court supported the decision of the Tokyo High Court, rejected
the defense’s recourse, and found that the NRIPS report was admissible because
the inspection and analysis on the DNA fingerprints were conducted in accordancewith scientific principles that were theoretically correct, by the persons whomastered the proper skills and by means and methods scientifically reliable.40
As a result, the imprisonment for indefinite term sentence (life sentence)
against Mr Sugaya had become final and binding and he was incarcerated in the
Chiba prison on 17 July 2000. However, Mr Sugaya continued to protest his
innocence from inside of the Chiba prison and repeatedly demanded DNA retesting and a retrial (revision). In 2008 the Tokyo High Court, accepting his
request, and nominated two forensic scientists for the re-test: one recommended
by the prosecution and the other by the defense. The shirt was divided between
the two experts, who accomplished newly the DNA analysis. It was a very difficult
mission because 19 years had passed since the crime had occurred and the crime
scene sample had become very old and was in bad condition.41 Nevertheless, the
new DNA analysis with more advanced method (Y-chromosomal STR testing)conclusively showed that he could not be linked with the murder.
Thus, on the basis of the new DNA analysis, Mr Sugaya was released from
39 Tokyo High Court 9 May 1996, Kokeishu 49-2, 181.
40 SC 17 July 2000, Keishu 54-6, 550.
41 According to H. Sato, n 36 above, 26, the shirtsleeves’ shirt was not conserved under thecontrolled temperature.

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the jail in 2009 after more than seventeen years of imprisonment and acquitted
definitively by the court of retrial in 2010.42
VII. The Situations After the Ashikaga Case
The Ashikaga case was taken seriously, because on the one hand it was a
DNA type analysis that caused the erroneous judgment, yet on other hand, theevidence that allowed the error to be discovered, and which allowed Mr Sugaya
to be released from the jail was also a DNA type analysis. It is worth noting thatthe DNA type analysis that caused false conviction against Mr Sugaya wasconducted using a primitive method, whereas the one that saved him fromprison was more advanced. Successively, other cases, in which result of the oldmethod of DNA type analysis was used as decisive evidence to establish theidentity of the accused with the author of the crime, were reexamined, andsome of them were found erroneous.43
The situation became even complicated because the institution of saibanin, the participation of the lay judges with professional judges in criminal trial
on heavy offenses, was introduced in 2005 and started in 2009. Thus the practiceand the doctrine were faced with the serious problem: How do we handle thescientific evidence in criminal proceedings with the participation of lay judges.
Since the year 2010, research into, and discussions relating to scientificevidence have intensified. For instance, the Judicial Research and Training
Institute of the Supreme Court conducted a research on scientific evidence focusing
especially on the DNA type analysis in 2010 and the report was published in
2013.44 However, report was harshly criticized by some authors for being too
optimistic about the reliability of the recent method of DNA type analysis.45
After the Ashikaga case, interest in comparative research, not only into thedevelopment of the case law and disputes in the United States including theFrye and the Daubert standard, and the reform of the Federal Rules of Evidence
in 2000 but also into the situations in other common law countries, for example
the UK and Australia intensified among scholars.46
However, many problems still remain unsolved and for the Japanese judicial
42 Utsunomiya District Court 26 March 2010, Hanrei-jiho 2084, 157.
43 The most famous is the so-called murder of a woman working for Tokyo Electric Power

Company, in which the Nepalese accused, Mr Govinda Prasad Mainali was released after fifteen
years of wrongful imprisonment. See M. Ibusuki et al, ‘Scientific Evidence and Criminal Trial’
Quarterly Keiji-Bengo, 76, 82 (2013).
44 The Judicial Research and Training Institute, Scientific Evidence and Criminal Trial
(Tokyo: Hosokai, 2013).
45 M. Ibusuki et al, n 43 above, 76.
46 Y. Tsujiwaki, ‘Relevancy and Reliability of Scientific Evidence’ 7 Meiji Law School Review,
413 (2010); G. Naruse, ‘Admissibility of Scientific Evidence (2)-(4)’ Journal of the Jurisprudence
Association (Tokyo University), 130(2), 386; 130(3), 573; 130(4), 801 (2013).

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126

system it is important to start working on these issues with urgency.
First, there is a need to establish standards or criterion to determine theadmissibility of scientific evidence and assess its reliability.
As for the admissibility, three standards can be from the holdings of theSupreme Court on the Ashikaga case; 1) if the scientific principles used for theinspection and analysis are theoretically correct or not; 2) if the inspection andanalysis are conducted by the persons who mastered proper skills or not; 3) if
the means and methods used for the inspection and analysis are scientificallyreliable or not.
Of course these standards are still too vague and abstract, because they do
not even define ‘scientific evidence’ and each standard needs precision to function
substantially as a formula to determine admissibility of scientific evidence. In
fact, it did not work well in the Ashikaga case so as to screen out the primitive
method of DNA type analysis and failed to prevent the serious error of judgment.
However, simple importation of the Frye or Daubert standard or any otherforeign standards might not be solution neither in Japan: we need to refine thedefinition of scientific evidence and standards to determine the admissibility,
and in reconstructing the law on evaluating scientific evidence.
Secondly, we need to prepare institutions to ensure that judges (andprosecutors and lawyers) can substantially and correctly evaluate the relevancy
and reliability of scientific evidence. The scientific education and training of
judges, though a plausible solution is a limited one, in light of the fact that it is
impossible for them to learn all the fundamental principles of each domain ofscience. Moreover, the evaluation of the relevancy and reliability is not only amatter of correctness of scientific principles and methods but also a matter ofhuman error. Because even if the principles and methods used for inspection andanalysis of scientific evidence were theoretically correct, the result is reported byhumans, who are not completely exempted from error, prejudice or impartiality.
Thus we need to have reasonable procedural institutions so as to avoid such risks.
Thirdly, it is important to reserve the possibility to retest the evidence andto revise the judgment. The possibility to revise the judgment might be guaranteed
institutionally by admitting relatively broadly re-examination of the evidence
and appeal or retrial. Whereas possibility to retest the evidence is reserved factuallyby conserving good conditions of the samples so as to avoid the degenerationand contamination. In order to reserve the possibility, the scientifically appropriate
conservation of the samples is indispensable.
It is even more important if we consider the development of science andtechnology. The Supreme Court, in the Ashikaga case, held that the probativevalue of the evidence shall be estimated carefully taking into consideration thefacts newly discovered as a result of the subsequent development of science andtechnology. Nevertheless, the Court rejected the request for re-test of the DNA

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type by a more advanced method demanded from the defense.47 If the Court hadordered the re-test at that time, the error could have been discovered much earlier.
Mistakes and errors are inevitable in the human world, no matter how
much advanced and developed the science. So the most important thing inhandling scientific evidence for all the people who concern the Criminal Justiceis to be always conscious of the possibility of error in assessment or judgment aswell as to be honest and courageous to acknowledge mistakes when discovered.

47 H. Sato, n 36 above, 26.

Current Situation of Consumer Bankruptcy in Japan
Masaki Sakuramoto

Abstract
In Japan, starting with the bursting of the bubble economy in the early 1990s, andfollowed by a series of crises, such as the global financial crisis caused by the Lehman
Brothers Shock of 2008, and the Great East Japan Earthquake of 11 March 2011, theeconomic life of consumers has been heavily affected by a serious, long term economic
depression. For instance, consumer insolvencies sharply increased due to multiple debts.
As a consequence, expressions such as ‘debt adjustment’, ‘individual rehabilitation’, ‘credit
card bankruptcy’ and ‘credit loan bankruptcy’ have been routinely used when dealing withthis topic.
In this article, I would like to analyze the following three points that illustrate thecurrent situation of consumer bankruptcy based on the latest data.
1. Numbers of petitions for bankruptcy accepted by district courts;
2. Characteristics of bankrupts in consumer bankruptcy;
3. Numbers and rate of orders granted discharge by the district courts.

I.

Purpose of This Article

The purpose of this article is to illustrate the current situation of consumer
bankruptcy (消費者破産) in Japan, which is central to consumer insolvency (消費者倒産), based on (1) the numbers of petitions for bankruptcy accepted by
the district courts, (2) the classification of types of consumer bankrupts, and (3)the numbers and rate of orders granted discharge by the district courts.
II. Introduction
In Japan, the prolonged and worsening economic slump caused by the socalled burst of the bubble economy from the early 1990s, the so-called Lehman
crash in 2008, and the Great East Japan Earthquake of 11 March 2011 is still
having a major impact on the economic life of consumers. For instance, when
taking a look at individual bankruptcy cases, consumer insolvency expressedusing terms such as debt adjustment (債務整理), individual rehabilitation (個人Professor of Insolvency Law, Toyo University, Faculty of Law.
This article is a revised version of the presentation reported at an international symposium cohosted by Toyo University and Ca’ Foscari University of Venice held at the Ca’ Foscari University of
Venice on 26 November 2015.

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130再生), credit card bankruptcies (カード破産) and credit bankruptcies (クレジット破産) particularly caused by multiple debts (多重債務) has increased
dramatically. As a result, consumer insolvency became an issue in the field of
insolvency laws, and, in particular, consumer bankruptcy, which accounts for mostof such consumer insolvency, came under close scrutiny as an urgent issue.
Nevertheless, the term ‘consumer bankruptcy (消費者破産)’ is not used in
the Japanese Bankruptcy Act 2 June 2004 no 75. In addition, terms such as ‘credit
card bankruptcies’ and ‘credit bankruptcies’– which are used as terms that aresynonymous with consumer bankruptcy – are also missing in the Japanese
Bankruptcy Act.
The Japanese Bankruptcy Act is not principled on the bankruptcy of traders
like the Italian and French Bankruptcy Act. It is based on the fundamental
bankruptcy principle which doesn’t distinguish between trader and non-traders
as in England and Germany. The Japanese Bankruptcy Act prescribes both thebankruptcy of artificial persons and that of natural persons, and it could be said
that the framework of bankruptcy procedures is basically the same for both
artificial persons and natural persons.
With respect to this point, unlike Japan, the bankruptcy of companies andentrepreneurs (juridical person) and the bankruptcy of consumers (natural (civil)
person) are prescribed in separate laws in Italy. In other words, the bankruptcy
of entrepreneurs is prescribed under the law referred to as the Bankruptcy Act,and the bankruptcy of consumers is prescribed under the law referred to as the‘Provisions regarding usury and extortion, as well as composition of overindebtedness crises’. The latter is hereinafter referred to as the ‘Italian Consumer
Bankruptcy Act’ 27 January 2012 no 3 for the sake of convenience.
In this article, I would like to define the term ‘consumer bankruptcy’ as one
distinctive and most-often encountered type of bankruptcy in which mostbankruptcies are by consumers, and are filed for the purpose of obtaining adischarge.
Common characteristics found in many consumer bankruptcy cases include
the following; specifically, a) the petitioner is a consumer as a civil debtor who isnatural person, b) the petitioner has fallen into a state of multiple debts, c) in manycases, the petition for bankruptcy is filed not by the creditor, but by the debtor
himself/herself, d) in many cases, the court issues an order of discontinuance ofbankruptcy proceedings upon issuing an order of commencement of bankruptcy
proceedings, and e) most importantly, the petition for bankruptcy is filed for the
purpose of obtaining a discharge.
The discharge clause was not previously prescribed under Italian laws, but
a discharge was foremost acknowledged for entrepreneurs pursuant to the revisionof the Italian Bankruptcy Act in 2006, and then was additionally acknowledged
for civil debtors and consumers under the Italian Consumer Bankruptcy Act of2012. Since this ‘discharge’ will most likely play a major role in the consumer

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The Italian Law Journal[Special Issuebankruptcy cases in Italy in the future.
III. Current Situation of Consumer Bankruptcy
According to the Statistics by the National Police Agency, the total numberof suicide victims in 2017 was twenty-one thousand three hundred twenty-one
people, and three thousand four hundred sixty-four people among these victims
committed suicide because of economic or personal problems.1 Looking at the2017 average of victims who committed suicide because of economic or personal
problems, reveals approximately ten people committed suicide per day or one
suicide approximately every two point five hours. While the number of victims
who committed suicide because of economic or personal problems is decreasing as
a whole, the number is more than two times that of the ten thousand threehundred nineteen persons in 1989 when the so-called bubble economy reached
its peak. Of course, not all of the victims who committed suicide because of
economic or personal problems matters were a result of consumer bankruptcy
due to their inability to pay multiple debts, but it appears that many of thesesuicide victims corresponded to consumer bankruptcy when giving consideration
to today’s economic circumstances.
1. Number of Bankruptcy Cases Filed
Graph 1 shows the transition of bankruptcy cases that were newly filed from1989 to 2016 in Japan.
‘Cases that were newly filed’, it refers to cases that were newly accepted by
district courts. While there may be cases where certain cases are counted
redundantly as a result of being transferred from a different court, these figures
can be considered as the general number of bankruptcy cases that were filedwith the courts. As explained in detail below, in Japan, unlike in Italy, acommencement order is issued by the court for basically all bankruptcy casesthat are filed, and procedures are thereby commenced.
There were ten thousand three hundred nineteen cases in 1989 when the
bubble economy started to collapse. In 2003, so-called ‘Yami-Kinyu (loan sharks
based on the yakuza (Japanese organized crime syndicates))’ became a big social
problem in Japan, so the number of bankruptcy cases filed had peaked in thisyear at two hundred fifty one thousand eight hundred cases. But the number ofcases has gradually decreased year-by-year to seventy-one thousand eight hundred
1 Available at https://tinyurl.com/y9blmnpc, 2, 6, 25 (last visited 15 November 2018). By
way of reference, the death rate of suicide victims was twenty point seven per one hundred
thousand persons according to Japanese statistics of 2013, and six point four persons
according to Italian statistics of 2012, which means that the death rate caused by suicide inJapan is more than triple in comparison to that of Italy, available athttps://tinyurl.com/ybzl722u, 35 (last visited 15 November 2018).

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132

thirty-eight2 in 2016.
Graph 1

One reason for this is because, in 2003, the so-called ‘Yami-Kinyu
Countermeasures Act’ (formally known as the Act for Partial Revision of
Moneylending Control Act and Investment Act) was revised, and penalties were
strengthened against unregistered moneylenders and high-interest loans, aswell as against illegal collection of loans (for instance, collecting debts by repeatedly
calling the debtor’s workplace or calling the debtor’s home at night, going overto the debtor’s home and yelling out loud, or in a manner that verges on extortion).
Subsequently, the Moneylending Control Act was partially revised in 2006,
and (1) excessive loaning was inhibited, the total amount that may be loaned
was restricted to be up to one third of the borrower’s income, and the borrower’s
income must be accurately calculated by causing the borrower to submit awithholding certificate to maintain effectiveness, (2) gray zone interest rates
were abolished and the interest rate that was valid as so-called constructive
repayment up to twenty-nine point two per cent was lowered to fifteen/twenty
per cent according to the amount of the Interest Rate Restriction Act, constructive
payment was abolished, and penalties were strengthened against the violationof these revisions in order to place strict restrictions on lenders, and (3) callcenters such as the Japan Legal Support Center and consumer hotlines were
established with the government and local public agencies playing a central part
2 General Secretariat of the Supreme Court, Annual Report of Judicial Statistics for 2016
(Tokyo: Lawyers Association, 2017), 72. Other case counts are also based on the annual reportof judicial statistics of each year.

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in the creation process of these call centers, and safety-net loans for individuals
such as the system of loaning for social welfare were enhanced so as to protect
the borrowers. Thus, the public and private sectors have joined hands and taken
measures for eradicating the problem of multiple debts.
By way of reference, the number of cases in which bankruptcy proceduresof companies were taken in Italy was fourteen thousand four hundred seventyfive3 in 2015 based on the latest materials. Nevertheless, the number of consumer
bankruptcy cases (bankrupt persons) in Italy is unclear, and it would be impossible
to compare the number of bankruptcy cases in Japan and Italy unless the numberof consumer bankruptcy cases in Italy is added to the foregoing number ofcorporate bankruptcy cases. However, when using the number of cases in whichbankruptcy procedures were commenced in Italy as a reference and applying itto the population of Japan, the result shows twenty-eight thousand nine
hundred fifty cases, and the number of bankruptcy seventy-one thousand five
hundred thirty-three cases in Japan in 2015 is approximately two point fivetimes that of Italy even after performing the calculation upon applying the figures
to the population of Japan. The characteristics of the number of bankruptcy
cases in Japan and Italy are that, while the number of bankruptcy cases filed
and the number of cases in which bankruptcy procedures were commenced inJapan are basically the same, there is a considerable difference in the numericalvalues of the two in Italy. For instance, when taking 2015 as an example, thenumber of fourteen thousand four hundred seventy-five cases in which bankruptcy
procedures were commenced has decreased to one third of the number ofbankruptcy forty-one thousand thirty-six cases that were filed.
2. Characteristics of Bankrupts in Consumer Bankruptcy
As characteristics of bankrupts in consumer bankruptcy I will mention
gender, ratio by age, income, amount of debt, occupation, and cause of bankruptcy.
This information is based on the record surveys issued by the Japan
Federation of Bar Associations.4 This survey has been conducted nine times so
3 Available at https://tinyurl.com/y8n933jq, 196 (last visited 15 November 2018).
4 The Japan Federation of Bar Associations the Consumer Affairs Committee has issued

the following nine Record Surveys, available at https://tinyurl.com/y82e6g67 (last visited 15
November 2018). Record Survey of Bankruptcy Cases and Individual Rehabilitation Cases in2014 (2014); Record Survey of Bankruptcy Cases and Individual Rehabilitation Cases in 2011
(2011); Record Survey of Bankruptcy Cases and Individual Rehabilitation Cases in 2008
(2008); Record Survey of Bankruptcy Cases and Individual Rehabilitation Cases in 2005
(2007); Record Survey of Bankruptcy Cases and Individual Rehabilitation Cases in 2002
(2003); National Survey of Bankruptcy Records in 2000 (2000); National Survey ofBankruptcy Records in 1997 (1999); the survey of 1994 is based on the Collection ofDocuments Concerning Revision of Bankruptcy Act in Relation to Consumer Bankruptcy,
215, (1997), and the survey of 1992 is based on the Results of Questionnaire Concerning Consumer
Bankruptcy Survey and Debt Adjustment of Multiple Debts and Questionnaire of Bar Association
Concerning Consultation on Multiple Debts (1992).

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Consumer Bankruptcy in Japan134

far in the years of 1992, 1994, 1997, 2000, 2002, 2005, 2008, 2011, and 2014.
Please note that these surveys include bankrupt persons among sole
proprietors as a result of randomly extracting bankrupt persons who are natural
persons, which is why the amount of debt is considerably high. Thus, it should
be kept in mind that these surveys may not necessarily be an accurate reflectionof the figures of consumer bankruptcy of income and amount of debt.
a) Concerning the gender of bankrupt persons (graph 2), all surveys basicallyshow the same rate, and there was no bias based on gender. However, in 2011
and 2014, bankruptcies by men surpassed those by women by roughly ten percent. Nevertheless, since the ratio of suicide victims of men and women in
Japan is three to one, as explained above, the bias is minimal in comparison tothis ratio.
Graph 2b) Concerning bankrupt persons by age (graph 3), data only from 2005 is
included for the sake of simplification. In comparison to the year 2005, which is
before the Lehman crash, a sweeping generalization would be that, on the one
hand, bankruptcies by people in their forties, sixties and seventies are of anincreasing tread on the one hand, but, on the other, bankruptcies by people inIn these nine record surveys, the number of cases and items to be surveyed are not necessarily
unified, but the survey items have been unified from the record survey of 1997 onward. Nevertheless,from the survey of 2014, the contents have been slightly modified such as the option of ‘purchase bycredit card’ being added to the cause of debt of bankruptcy and individual rehabilitation.
The respective figures used in this chapter are based on the record survey of the corresponding
year.

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their twenties and thirties are of a decreasing trend on the other, and the aging
of consumer bankrupt persons is notable. When calculating the average age
based on the 2014 Survey (calculating the intermediate value of men and womenby age (for instance, calculating people in their twenties as being twenty-fiveyears of age, and calculating people in their seventies or older as being seventyfive years of age)), in 2005 the average age of men is forty-five point four years
and the average age of women in 2005 is forty-five point nine years, and theaverage age of both men and women in 2005 is approximately forty-six years.
But in 2014 the average age of men is fifty point two years and the average ageof women is fifty point four years, and the average age of both men and womenin 2014 is fifty-two point four years, and the aging of consumer bankrupt persons isnotable.
Graph 3c) Concerning the income of bankrupt persons (graph 4), irrespective of theyear, the most common monthly income was less than fifty thousand yen, but in2014 the most common monthly income was ‘one hundred thousand yen or
more and less than one hundred fifty thousand yen’ (approximately twenty-four
per cent of reported cases), and the next common monthly income was the zone

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Consumer Bankruptcy in Japan

136‘less than fifty thousand yen’ (approximately twenty per cent). Nevertheless,unlike before, there is no drastic difference between the respective income ranges,
and it could be said that people are filing for bankruptcy irrespective of the income
range.
Graph 4Moreover, while this is not indicated in the table and graph, in the 2014
Survey, while men with a monthly income of less than fifty thousand yen (including
no income) accounted for approximately sixteen per cent of bankruptcies, theratio of women was ten per cent greater, accounting for approximately twentyseven per cent. Contrarily the ratio of men having a monthly income of two
hundred thousand yen or more was approximately thirty per cent, and the ratioof women was approximately ten per cent. The fluctuation of monthly income
based on gender is notable, and we can see that women who declare bankruptcy
have a lower income. Furthermore, while the average monthly income was one
hundred ten thousand sixty one yen in the 2005 Survey before the Lehman
crash, the average monthly income increased by roughly twenty thousand yen
in 2014 to one hundred thirty-one thousand six hundred twelve yen. Still, thefact remains that the people who file for bankruptcy have a low income.
d) Concerning the amount of debt of the bankrupt persons (graph 5), sincecases where the total amount of debt is greater than one hundred million yen
account for four point thirty-five per cent among all cases, as explained above, itappears that the bankruptcy of entrepreneurs as natural persons is included inaddition to those of consumers. In the annual survey from 2005 onward, the137

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amount of debt of ten million yen or more is the most common and accounts
for approximately thirty per cent of declared bankruptcies, but in the 2014
Survey, this amount of debt increased considerably to approximately forty percent of cases. Contrarily, while the amount of debt of under seven million yen
represented approximately sixty-seven per cent of bankruptcies in 2005, thepercentage of this amount of debt decreased to fifty-five per cent in the 2014
Survey. However, the amount of debt of under one million yen equalled
approximately nine per cent of cases in 2005, but increased to more thandouble to twenty-one per cent in 2014. Thus, cases of filing for bankruptcy evenwhen the amount of debt is small are an increasing trend.
Graph 5Moreover, while this is not indicated in the table and graph, the ratio of
women with up to under three million yen of debt, forty-five point twenty-three
per cent, is nearly double the ratio of men with the same burden, twenty-threepoint sixty-one per cent. The fluctuation of the amount of debt based on genderis notable: women file for bankruptcy at a smaller amount of debt. Furthermore,while the average amount of debt was seventeen million nine hundred thirty
thousand seven hundred seventeen yen in the 2005 Survey, the average amountof debt increased approximately one point three times to twenty-four million
one hundred forty-three thousand three hundred twenty-nine yen in the 2014
Survey, and the amount of debt of one hundred million yen or more also
increased from three point eighty-nine per cent in 2005 to four point thirty-five
per cent in 2014. The total amount of debt is heading toward both extremes.

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Consumer Bankruptcy in Japan138e) Concerning the occupation of the bankrupt persons at the time that they
filed for the commencement of bankruptcy procedures (graph 6), while the ratio of
unemployed and full-time salaried workers is decreasing, the ratio of these twogroups still accounts for nearly half of all cases at approximately forty-seven percent, and remains at a high level. Moreover, the ratio of pensioners and welfare
recipients has increased considerably in comparison to the 2005 Survey, andthe ratio of part-time workers has also increased.
Graph 6f) With regard to the cause that led to bankruptcy (table 1), the total
percentage exceeds one hundred per cent since multiple answers were allowed,
but the most common cause in 2014 was ‘hardships of life/low income’ at sixty
per cent. This is basically the same as the percentage of sixty-one point nine percent in 2005 before the Lehman crash. The causes of ‘illness/medical expenses’
and ‘unemployment/job change’ also show similar figures as those of 2005.
Contrarily, the cause of ‘overspending/entertainment expenses’ decreased to six
per cent, which is a one per cent decrease from 2005, and the cause of ‘gambling’
was approximately four per cent, and increased by zero point five per cent from2005. The ratio of ‘gambling’ and ‘overspending/entertainment expenses’ did
not change considerably and merely accounts for approximately ten per cent,but the most common cause of ‘hardships of life/low income’ accounts forapproximately sixty per cent of all cases and, when combined with the cause of‘pay cut’ which accounts for thirteen point five per cent, the total is seventythree point five per cent, a large percentage of the total. Based on these facts andthe previous results by age, as the primary cause of bankruptcy, it could be said
that the recession-induced bankruptcy is still ongoing where persons of an age
who need to support their family file for bankruptcy due to ‘hardships oflife/low income’ or ‘unemployment/job change’, rather than young people filingfor bankruptcy as a result of overspending or entertainment.

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Table 1

To briefly summarize the standard characteristics of bankrupt persons in
consumer bankruptcy based on the Record Survey of 2014: the ratio ofmen/women is basically six to four, the average age is approximately fifty-two
point four years (about fifty point two for men and fifty point four for women),the occupation is salaried workers including part-time workers, the monthly
income is approximately one hundred thirty-one thousand six hundred twelve
yen (approximately one hundred thirty-nine thousand four hundred forty yen
for men and about one hundred thousand seven hundred forty-nine yen for
women), 5 the main cause that led to bankruptcy is ‘hardships of life/low
income’, and the amount of debt is approximately twenty-four million one
hundred forty thousand yen. Note that the average amount of debts6 when theamount of debt is capped at fifty million yen, as with individual rehabilitation
procedures, is approximately nine million five hundred twenty thousand yen.
In comparison to the Record Survey of 2005 before the Lehman crash, theratio of men to women increased from fifty percent to fifty percent, to sixty
5 The monthly income is the intermediate value of the respective monthly income ranges

that were surveyed, and is the average value calculated, for instance, by deeming a monthly incomeof fifty thousand yen or more and less than one hundred thousand yen as being seventy-fivethousand yen. However, the eight persons whose monthly income was unknown and the fiftyfour persons who had a monthly income of three hundred thousand yen or more in which theintermediate value could not be set (total of sixty-two persons who account for approximately
five point four per cent of all persons) have been excluded.
6 The debt is the intermediate value of the respective debt ranges that were surveyed, andis the average value calculated, for instance, by deeming a debt of two million yen or more andless than three million yen as being two point five million yen.

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Consumer Bankruptcy in Japan140

percent to forty percent (ie, a ten per cent increase of men), age increased by six
years from approximately forty-six years to approximately fifty-two years,
which indicates aging, and average income increased by about thirty thousand
yen from approximately one hundred ten thousand yen to approximately one
hundred forty thousand yen. The occupation of the bankrupt continues to besalaried workers, including part-time workers who account for half of all bankrupted
people. The main cause that led to bankruptcy is ‘hardships of life/low income’,and there is no significant change on this variable. (The average debt when theamount is capped at fifty million yen as with individual rehabilitation procedures isapproximately nine million five hundred twenty thousand yen, an increase fromthe amount of approximately eight million ninety thousand yen in 2005).
3. Number of Bankruptcy Discharges Granted
The term ‘discharge’ means,‘The bankrupt shall be discharged from his/her liabilities for bankruptcy
claims, except for a liquidating distribution through bankruptcy proceedings’.7
In other words, this is a system where, if a discharge is granted, a person isallowed to restart one’s economic life without having to bear debts, that is tosay, ‘make a fresh start’, and this system plays an important role in today’s
Bankruptcy Act. The discharge system was adopted in Japan in 1952, and wasintroduced into the Bankruptcy Act in Italy in 2006.
In the days of Roman law, a debtor would be killed if he/she was unable to
pay the debt, and the creditor would take home a part of the debtor’s body inaccordance with the amount of claim. Today, a bankrupt person is allowed topress the reset button and restart one’s life when a discharge is granted. It could
be said that the Bankruptcy Act is one of the legal systems in which thependulum swung the greatest from one end to the other.
The requirements of a discharge are as follows; namely, (1) the person filingfor bankruptcy is a natural person, (2) a petition for discharge is filed separatelyfrom a petition for bankruptcy, and (3) the person filing for bankruptcy does
not correspond to grounds for non-grant of discharge. Among the above, (3) the‘grounds for non-grant of discharge (免責不許可事由)’ are very important. Thesegrounds are prescribed in Art 252, para 1, Item 1 to Item 11 of the Bankruptcy
Act, and some examples include: significant reduction of property by conducting
extravagant spending, gambling or any other speculative act, assumption ofexcessive debts, filing of a petition for grant of discharge within seven years
from the day that the initial discharge has been granted, a breach of duties
prescribed in the Bankruptcy Act. If I may disregard the details and offer a
sweeping generalization, these three requirements are basically the same as
7 Art 253, para 1, of the Japanese Bankruptcy Act.

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those for a discharge to be granted in Italy. The third requirement is prescribedin Art 142, para 1, Item 1 to Item 6 of the Italian Bankruptcy Act as the eligibility(meritevolezza) requirement under the Italian academic definition.
If I were to point out one requirement that differs between Japan and Italy
in connection with granting a discharge, it would be that, while Italy has arequirement where a discharge is not granted if the ‘creditor is not repaid evenin part’ under Art 142, para 2 of the Italian Bankruptcy Act, Japan has no suchrequirement and most consumer bankruptcy claims are granted a discharge
without having to pay even one yen, that is to say even one ‘centesimo’, to thecreditor. The reason why Japan does not adopt this requirement is, to begin
with, consumer bankruptcy is a case where a person files for bankruptcy because
he/she has no notable property or money, so it would be meaningless to impose
a requirement to repay the creditor, even in part, in order to grant a discharge
to the bankrupt person; rather, such a requirement is considered to lead to theimpediment of the rehabilitation or revitalization of the bankrupt. In addition,
since most of the creditors are moneylenders anyway, it could be said that they
are individually responsible for the ‘miscalculation’ of loaning money to such
debtors to begin with, even if they are unable to collect their claims from bankrupts,
because there is no such payment requirement.
Concerning the numbers and rate of orders granted discharge by the district
courts in Japan (table 2), in 2014 sixty-five thousand eight hundred eighteen
discharges were granted, while one hundred forty-eight were not. The grant rate
is ninety-nine point eight per cent and the non-grant rate is zero point two percent, so discharges are granted at a considerably high rate. This rate has hardly
changed in the last several years.
It is undeniable that the reason for this is also delicately related to moral
hazard, but the reason why a discharge is given preference over moral hazard isbecause, if a bankrupt person is left with debt, he/she will continue to bear thatdebt for the remainder of his/her life, and may eventually despair and lose thewill to continue living. If such becomes the case, the problem cannot be resolvedin any way even if the bankruptcy system is used.
What kind of bankrupt persons are not granted a discharge? The material
only describes the numbers of discharges non-granted, so I’m speculating thereasons, but it may be in cases where the bankruptcy corresponds to grounds
for non-grant of discharge as a result of engaging in criminal activity such as
fraudulent bankruptcy prescribed in the Bankruptcy Act. Alternatively, even if
the bankruptcy does not correspond to the foregoing criminal activity, it may
correspond to grounds for non-grant of discharge due to‘malicious demeanor (悪質な態様)’, for example, cases where the amount of debt is extremely highdue to overspending or gambling.

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Table 2

While it would be interesting to compare the number of discharge caseswith the current status of the Italian discharge system, but the number of Italiandischarge cases is still unknown to me even after conducting research for several
years. I hope to find an answer someday by continuing my research.
IV. Conclusion
In summary, the number of bankruptcy cases filed in Japan peaked at two
hundred fifty-one thousand eight hundred cases in 2003, and then gradually
decreased year by year seventy-three thousand three hundred sixty-eight casesin 2014, approximately a quarter of the number of cases at the peak. Nevertheless,the number of bankruptcy cases filed is still seven times more compared to thetime that the bubble economy collapsed, and there is no choice but to say that itis still at a high level.
As characteristics of bankrupt persons, it is not the young people who are
filing for bankruptcy as a result of purchasing luxury goods or spending moneyon entertainment or leisure, and the number of bankrupt persons in theirforties who need to support their families, but are unable to do so due to‘hardships of life/low income’ including pay cuts and unemployment caused by
the chronic depression, is increasing. Based on these results, it is my opinion
that bankrupt persons, excluding ‘malicious ones (悪質な破産)’, should be
granted a discharge and be given an opportunity to press the reset button for

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their debts and restart their economic lives. I believe the same thinking of myopinion is reflected in the results of many discharges being granted in Japan.

Contribution-Benefit Relationship in Social Security in
Italy and Japan
Seiyo Kojima

Abstract
Regarding social security in Italy, any bilateral or corresponding relationship between
contribution and benefit is considered denied, following the ‘social security benefit
automaticity principle’ under Art 2116 of the Italian Civil Code of 1942. Meanwhile, inJapan, some connection between contribution and benefit in the social insurance system
is generally considered almost self-evident. Despite these opposing basic perceptions, inreality, the legal systems and operations in both countries governing the contributionbenefit relationship are extremely similar. The employee’s right to receive benefits under
the social security system is generally protected from any failure on part of the employer
in making his/her contribution. At the root of this asymmetry in both countries, there
may be differences in the understanding concerning the actor(s) responsible for contributing
toward financial resources for social security.

I.

The Background
1. The Contribution-Benefit Relationship

Financial resources are required in order to provide social security benefits.
In social insurance systems, that is, those that use insurance infrastructure, bydefinition, contributions are the main source of finance. Accordingly, systems
for workers or employees usually involve contributions made by both employee
and employer.
This is where financial resources come from. Let us consider whether or
not there is any relationship between individual contributions or contribution
obligations and individual benefits or benefit entitlements. The issues are whether
one must make a contribution in order to receive benefits or not, whether one
must make a contribution even if one does not receive benefits or not, andwhether one can receive benefits even without any contributions or not. This
paper will refer to these issues as the contribution-benefit relationship.
2. Contrasting Ideas: Italy and Japan
Professor of Social Security Law, Senshu University. We would like to thank Editage(www.editage.jp) for their English language editing service.

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In Italy, the principle of automatic social security benefit (‘principio
dell’automaticità delle prestazioni previdenziali’) exists. Put simply, this is aprinciple whereby an employee can receive benefits even if his/her employer
did not make appropriate contributions. The principle is mentioned under Art
2116 of the Italian Civil Code of 1942. Accordingly, any corresponding or bilateralconnection (‘corrispettività’ or ‘sinallagma’ in Italian, respectively) between
contribution and benefit is fundamentally understood to have been denied(‘negare’) or overcome (‘superare’).
Meanwhile, in Japan, while there is less active debate, and it is doubtful as
to whether such a common understanding as in Italy exists or not, there is,nonetheless, a shared recognition that the relationship between contribution
and benefit should definitely, to a degree, be bilateral and corresponding. For
instance, there is deep-rooted antipathy toward people insured under Categorythree National Pension, namely ‘housewives’ of salaried men, who are unfairly
deemed to be eligible to receive pensions without paying contributions.
3. Ideals and Responding to Reality
From the explanation given above, the perceptions and ideas in Italy andJapan seem quite different. We could even consider them complete opposites.
However, the two countries actually have extremely similar systems whenit comes to social security legislation, particularly, in how they regulate therelationship between individual contributions and benefits. It can even be said
that the two countries are almost the same in that the receipt of benefits isgenerally protected, even when a contribution has not been made.
How do we explain this similarity, despite the perceptions and ideas being
completely opposed to one another? This holds the key to understanding thecharacteristics of social security in each country. Addressing such correspondences
between ideals and reality can be an interesting task not only in terms ofcomparing Italy and Japan, but also from a wider, globally comparative
perspective.
This paper is intended to offer a starting point for such work.1 2
1 The table below details the key terms used in this paper.

ITALIAN LAWJAPANESE LAWCOMMON TERM (ENGLISH)

Previdenza, previdenzasocialeLavoratore, prestatore dilavoro (c.c.)Datore di lavoro,
imprenditore (c.c.)Contributo

shakai-hosho
shakai-hoken
hi-hokensha (insured person)social security
social insurance
employeejigyo-nushi

employerhoken-ryocontribution

2 Note that ‘previdenza’ and ‘previdenza sociale’ in Italian law may sometimes refer to‘social security’ and sometimes ‘social insurance’. In Italy, social security in a broad sense consists

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II. Ideals Concerning the Contribution-Benefit Relationship
1. Italy: Principle of Automatic Benefita) Legislative Process
The principle of automatic benefit is mentioned in para 1, under Art 2116 of
the Italian Civil Code, which was enacted in 1942. The provision defines it asfollows:‘Social security benefits as indicated under Art 2114 will be paid to theemployee, even when the employer has not appropriately paid the contributions
due to the social security system. However, this does not apply under different
provisions of any special laws’. (‘Le prestazioni indicate nell’Art 2114 sono
dovute al prestatore di lavoro, anche quando l'imprenditore non ha versato
regolarmente i contributi dovuti alle istituzioni di previdenza e di assistenza,
salvo diverse disposizioni delle leggi speciali (...)’).
It was already provided for by a 1935 law concerning labor incidents,3 and aunifying law concerning social insurance in 1939,4 to the effect that despite theemployer’s duty to pay contributions (Art 2115, Civil Code), benefits may bereceived even if an employer does not make contributions. Art 2116 of the Civil
Code made this provision a principle for all forms of social security. It must be
noted that before Art 2116 of the Civil Code, there was no stipulation of theprinciple of automatic benefit for pension systems.5b) Application to the Pension System
The proviso to Art 2116 of the Civil Code allows for exceptions under special
legislation. It was assumed from the time the Civil Code was enacted that thepension system would fall under one of these exceptions. Fundamentally, thiswas for financial reasons. In the end, however, no provision stipulating exceptions
was established. As a result, even though it was strange to interpret the text
literally, simply because automatic benefit had not been stipulated in a separate
law, for a long time, the automatic principle was not applied to the pension
system. This came to be established by a precedential ruling by the Italianof three sectors: ‘previdenza, assistenza, e sanità’. ‘Previdenza’ is a general term that refers to asystem of monetary benefit following prior contribution. In this sense, we may consider‘previdenza’ to be a collection of and a general term for individual social insurance systems.
Meanwhile, ‘previdenza’ may sometimes also be used to represent social security overall, including
the other two sectors. Accordingly, this paper uses differing translations depending on the context.
3 Regio decreto legge 17 August 1935 no 1765.
4 Regio decreto legge 14 April 1939 no 636.
5 In the unifying law above (R.D.L. no 636/1939), no pension system was included in thelist found in the provision (Art 27) stipulating the applicability of the automaticity principle toindividual systems.

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Supreme Court (ISC) (Corte di Cassazione).6
Later, the Brodolini Reforms were implemented in 1969. These reforms
expanded pension benefits significantly, based on labor union initiatives. They
also reached a sort of accommodating legislative solution to the issue of theprinciple of automaticity.7 A ‘principle of partial automaticity’ (‘automaticità
parziale’) was introduced, albeit only for the obligatory general pension (AGO)(‘Assicurazione Generale Obbligatoria per l’invalidità, la vecchiaia ed i superstiti’),from the National Institute for Social Security (INPS) (‘Istituto Nazionale dellaPrevidenza Sociale’). This introduced automaticity for as long as the period ofprescription, that is, the period of the right held by the INPS to collectcontributions from an employer, had not expired. These reforms also extended
this period of prescription from five to ten years.
The Dini Reforms in 1995 changed the calculation of pension benefit amounts
from a remuneration-based approach to a contribution-based approach. The
reforms also expanded the principle of partial automaticity to other pension
systems, going beyond the INPS AGO.8 Under these reforms, the period ofprescription, beyond which contribution collection rights would expire was also
cut down from ten to five years. This point is of particular significance in thispaper, so it will be detailed further below.
In 1997, the Constitutional Court overturned the previous precedent set by
the Supreme Court and ruled that the principle of automaticity should also be
applied, as written, with pension systems, provided there were no exception
stipulations.9 At this stage, however, the principle of partial automaticity had
already been provided for in each system, since these were interpreted as
exception stipulations. In reality, though, the change had little effect.
c) The Contribution-Benefit Relationship and the Principle ofAutomaticity
In general, the following two points are indicated as common knowledge
regarding the principle of automaticity. First, drawing on the social purpose andpublic nature of social security, the principle seeks to achieve social protection
without burdening an employee with, for instance, the risk of his/her employer
failing to pay contributions. Second, the principle separates social security mattersfrom private insurance contracts and denies or overcomes any bilateral orcorresponding relationships between contribution and benefit.
The second point relates to the topic of this paper. There are different nuances
depending on the author’s arguments. However, we may consider the following
to be an established and common understanding. Traditionally, with private
6 Corte di Cassazione 7 April 1992 no 4236, Informazione previdenziale, 787 (1992).
7 Legge 30 April 1969 no 153.
8 Legge 8 August 1995 no 335.
9 Corte Costituzionale ordinanza 5 December 1997 no 374, Giustizia civile, 617 (1998).

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insurance, it is understood that insurance contracts are set up between threeparties: the insurance carrier, the insured person, and the policyholder. However,the principle of automaticity in social security divides this single three-party
relationship into two two-party relationships. These are the relationship between
the employer and the social security body for the purpose of the contribution,and the relationship between the employee and the social security body for the
purpose of benefits. Both relationships are mutually independent. As a result,any bilateral or corresponding relationship between contribution and benefit issaid to disappear.10
The most thorough discussion in this regard was developed by one author
thus:‘the non-existence of a correspondence between contributions andsocial security benefits is (...) confirmed by the principle of automaticity’(‘l’inesistenza di una corrispettivita tra contributi e prestazioni previdenzialiè (...) confermata dal principio dell'automaticità’).11
Based on detailed arguments on the contribution-benefit relationship inearlier writings, the fundamental impossibility of any bilateral relationship between
contribution and benefit was asserted.12
This idea was also used in a precedential ruling by the ISC, and now appears
to be the dominant opinion. In a case before the ISC in 2003,13 it was decided
that there is an obligation to make a contribution even when it is not possible toreceive a benefit. In this ruling, the ISC highlighted points such as the principleof automaticity, and clearly stated that the foundation of social security is aprinciple of solidarity (‘principio di solidarietà’). The judgment also indicatedthat the concepts of corresponding obligations and bilateral relationships did
not adequately represent the system, and that there is no means of justification
through any reciprocal or causal link between contributions and benefits(‘il fondamento della previdenza sociale stia nel principio di solidarietà(...) non esiste tra prestazioni e contributi un nesso di reciproca giustificazione
causale’).
Here, ‘a link which is justified through some reciprocal, causal relationship’(‘un nesso di reciproca giustificazione causale’) is the exact phrase found inexpert studies to deny the existence of a bilateral relationship.

10 L. Riva-Sanseverino, ‘Disciplina delle attività professionali, impresa in generale: Art 20602134’, in A. Scialoja and G. Branca eds, Commentario al Codice Civile (Bologna-Roma: Zanichelli,1986), 565.
11 M. Persiani, Diritto della previdenza sociale (Padova: CEDAM, 19th ed, 2012), 49.
12 M. Persiani, Il sistema giuridico della previdenza sociale (Padova: CEDAM, 1960), 88-110.
13 Corte di Cassazione-Sezioni unite 27 June 2003 no 10232, Archivio civile, 34 (2004).

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2. Japan: Overwriting Insurance Principlesa) Insurance and Social Security Principles
In Japan, social insurance using insurance infrastructure is often used toachieve social security. It is said that with social insurance, insurance principles
will be overwritten by social security principles. Of the three main insurance
principles, those that do stand are the law of large numbers (the need to be able
to predict probabilities with groups over a certain size), and the principle ofbalance equality (the insurer has equal income-expenditure balance). The onethat does not stand is the principle of equivalence of benefit (‘performance’) andpremium (‘counter-performance’) which means that insurance premiums will
be probabilistically equal to benefit amounts.14
In other words, when a benefit is needed, the social security principle that
requires that definite provision is prioritized, and any insurance principles here
will be overwritten by the principles of social security. The degree of thismodification is subject to a variety of opinions and ongoing debates. Nonetheless,there is a shared perception of there being some relationship between insurance
premiums (contribution) and benefit, even if not one of equivalence; accepting
the existence of some correspondence, in a broad sense, does seem to be avague shared perception. One of the representative scholars of social security
wrote in a text about pensions that ‘even if not of equivalence, there is,nonetheless, some corresponding relationship’.15b) The Expression ‘Implication’ (Kenrensei)
The Supreme Court of Japan (SCJ) uses the expressions ‘implication’ or‘implicated’ (kenrensei in Japanese). This term was originally used to talk about
being related to some method or results (eg, see Art 54, para 1, of the Penal
Code of Japan, 1907, ‘Implicated crime’). In a 2000 ruling,16 it was held that
because there is an indirect implication between contribution and benefit with asurvivor’s pensions, the pensions do not qualify for loss of income calculations.
This means that a survivor’s pension benefit amounts were not included incompensation when the recipient died as a result of a tort.
Moreover, in a 2006 ruling,17 it was decided that National Health Insurance
contributions are collected as counter-performance on an insured person’s
ability to obtain benefit payments, and that even if two-thirds of the financial
resources used to cover benefits are public funds, it is still not possible to break
14 Y. Kikuchi, Shakai hoshō hō (Social security law) (Tokyo: Yuhikaku Publishing, 1st ed,2014), 22-24.
15 K. Hori, Nenkin hoken hō (Pension insurance law) (Kyoto: Horitsu Bunka Sha, 4th ed,2017), 66-72.
16 Supreme Court of Japan, 3rd Petty Bench, Judgment of 14 November 2000, Minshū
54-9, 2683.
17 Supreme Court of Japan, Grand Bench, Judgment of 1 March 2006, Minshū 60-2, 587.

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the implication between contribution, and being in the position to receive
benefits. This ruling resulted in denying the strict application of tax legalism (ie,the principle of no taxation without legal provisions thereof) under Art 84 of theConstitution of Japan to the collection of National Health Insurance contributions.
It must be noted that the perception generally held by most people is that
one will receive a pension because one has paid contributions. There are regular
discussions concerning profit and/or loss here. Some economists have longargued for the thorough application of insurance principles in social insurance
and the opposition of any income redistribution undertaken through social
insurance, such as pensions.
In the world of legal scholarship, there was traditionally a tendency to viewthe thinning of insurance principles positively. In recent years, in contrast withmethods of social assistance financed via taxation, there has been a growing
tendency to positively assess some correspondence in social insurance, focusing
on increasing ‘entitlement’ or ‘eligibility,’ for instance, through the ease of skippingmeans testing.18
III. Prevailing Legal Systems
1. Introduction
Before comparing the prevailing legal systems, we first need to establish an
arena for comparison and check for similarities.
a) Systems Subject to Comparison
We use pension systems for this comparison. Representative forms of social
insurance in Japan are healthcare, pensions, and nursing care. However, since
Italy has a national health service (SSN) (‘Servizio Sanitario Nazionale’), there is
no healthcare insurance there. There is also no social insurance for nursing care.19
Looking beyond Italy and Japan, from a global perspective, pension systems
have common frameworks and are amenable to comparison. Accordingly, in bothcountries, the contribution-benefit relationship in practice mostly becomes anissue for discussion and debate in the context of pension systems.
This paper looks at pension systems that deal with employees, specifically,
the INPS AGO (‘general obligatory pension’) system for Italy, and the Employee’s
Pension Insurance (kōsei nenkin hoken) system for Japan.
b) Shared Features of the Core Structures of Each System
18 Y. Kikuchi, n 14 above, 25-28.
19 While worker accident insurance does exist in both Italy and Japan, its benefit payout is
protected from any non-payment of contribution by employers in both countries. Thus, there islittle related debate.

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The core structures of both, the Japanese and Italian systems compared arealmost identical, and may be considered to present an unproblematic arena forcomparison.
First, in both countries, the social insurance connection between the actors
concerned is established compulsorily and automatically, based on the fact that
employees are subject to direction-dependence relations. In Italy, this is called
the ‘automatic establishment of social insurance connection’ (‘automatica
costituzione del rapporto previdenziale’). In Japan, the qualification for receiving
insurance is confirmed by the Minister of Health, Labour and Welfare, according
to Art 18 of the Employee’s Pension Insurance Act, 1954, but this is consideredan administrative act, officially confirming the qualification which is alreadyautomatically established by Arts 9 and 13 of the same Act.
Second, in both countries, the party responsible for paying contributions is
the employer. The burden is divided between employee and employer, but the
duty of payment of contribution in its entirety, including the employee’s portion,is the employer’s.20 In both countries, the employer is also obliged to give
notifications. Sanctions against violating duties are also almost identical.
Finally, in both countries, the basic design of benefit payouts, for old-age
pensions, features age and qualifying period criteria. Moreover, in both countries,
the benefit amounts are, in principle, proportionate to earnings, and proportionate
to the period as an insured person.
2. Benefit when Contribution Has not Been Paid: Basic Rules
In Italy, the ‘principle of partial automaticity’ described above is applied asa basic rule while considering what happens to benefits when an employer has
not paid contributions. This principle introduces automaticity, though limited
within the scope of the period in which the right to collect contribution is stillvalid, and has not expired (ie, the period of prescription). In other words, insofar as
the INPS is able to collect contributions, the principle of automaticity applies,
and there is no loss of benefit. In periods after which the INPS has become
unable to collect contributions, employees incur benefit losses.
Meanwhile, in Japan, provisions that make stipulations about this issue
can be found in Art 75 of the Employee’s Pension Insurance Act. The article
reads: ‘When the right to collect insurance contributions has expired, benefit
payments based on the contributions concerned will not be undertaken’. Again,in periods after which contributions can no longer be collected, employees incur
benefit losses.
It is noteworthy that the systems for the prescription periods of contribution
collection rights are also fundamentally the same in both countries. This means
20 However, the distribution of responsibility between labor and management differs.
Whereas the distribution is fifty- fifty in Japan, the ratio in Italy is approximately seventy-thirty
for the employer and the employee, respectively.

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that the prescription is invoked without a claim, and forcefully, at that. It alsomeans that it is not possible to make a contribution after the prescription period
is over.21 The prescription periods differ and are longer in Italy (five years in
Italy, and two in Japan). The period of prescription here is a key factor in the
Italian case.
3. Methods of Preventing the Occurrence of Benefit Losses by
Employees
This section examines the methods by which an employee may prevent
his/her losses after learning that his/her employer has not made contributions.
In Italy, after various debates, there is now a strong tendency, for it to be
more effective, to take action against social insurance bodies, such as the INPS,
rather than to consider working with the employer to pay correct contributions.
In other words, it is better to send notifications or alerts (‘denuncia’) to theINPS, in the event of a failure on part of the employer to make a contribution.
This notification has the effect of interrupting the expired prescription ofcontribution collection rights, while also extending the period of prescription.
First, when it comes to the extension of prescription periods, it was noted
earlier that the period of prescription is, in principle, five years. This is the resultof the shortening of the Brodini Reform-era ten-year period to five years by the
Dini Reforms. The Dini Reforms also established an exemption stipulation
whereby a notification or alert from an employee could keep the period at theexisting ten years. At present, the period is, in principle, five years, but can beextended to ten years if a notification to this effect is sent. Next, concerning theinterruption of prescription, which was recognized through the precedential
ruling by the ISC,22 ultimately, if an employee sends a notification or alert to the
INPS before the period of prescription ends, a further prescription period of ten
years is incurred from the relevant point in time. Accordingly, it is possible toexpand the scope of applicability of the principle of automaticity significantly,
however partial it may be. Indeed, in some cases, it is even possible to create
circumstances in which it may be viewed as identical to a complete principle ofautomaticity.
In Japan, a proviso to Art 75 of the Employee’s Pension Insurance Act
explains this issue. It states thus:‘This shall not apply when the prescription of the right to collectcontributions has expired following the submission of an employer
notification based on Art 27 concerning the qualification to be insured, arequest for confirmation of qualification from the insured person themselves
based on Art 31, or a request for correction of the Employee’s Pension
21 Italy: legge 8 August 1995 no 335, Art 3, para 9; Japan: Accounting Act, 1947, Art 31.
22 Corte di Cassazione 12 February 2003 no 2100, Giustizia civile Massimario, 318 (2003).

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Insurance Register based on Art 28.2’.
Setting aside the employer notification, this means that as an insured person,
it is possible to prevent benefit losses by taking action, such as confirmation
requests against the Minister of Health, Labour and Welfare (in practice, theJapan Pension Service (JPS) Branch Office), against the insurer, before theperiod of prescription ends.
4. Recovering Original Pension Benefits
This section considers whether or not it is possible to recover original
pension benefits later, when there have been some actual benefit losses.
In Italy, a life annuity (‘rendita vitalizia’) system was legally established in
1962.23 Here, an employer can request the INPS to set up a life annuity, andemployees can also make requests in place of an employer. The life annuity
supplements pension benefits, unchanged. This means that the lost pension
amount is supplemented and, combined with the portion that is not lost, fromthe INPS, the original pension amount is provided intact. In addition to
supplementing monetary amounts, by fulfilling the qualification period criteria,
it is also possible to restore the qualification to receive benefits itself. The employer
is responsible for financing the actuarial accumulated amount.
In Japan, the ‘Act concerning special cases of Employee’s Pension Insurance
benefit and contribution payments’ (a special treatment law under the Employee’s
Pension Insurance Act), was established in 2007, in response to the ‘lost pension’problem. At first, this did in fact provisionally function as special legislation
using a third-party pension record checking council under the Ministry of Internal
Affairs and Communications (MIC). A revision of the Employee’s Pension
Insurance Act in 2014 made the system permanent, combined with, for instance,
structures for requesting correction of register records. Insured persons who hadquestions about their own pension records, such as when their employer has not
paid contributions, are allowed to make a request for the corrections of theirrecords by the Minister of Health, Labour and Welfare (in practice, the JPS
Branch Office), even after the right to collect contributions has expired due to its
period of prescription. When a request is granted after inspection, qualifications
may be renewed, standard remuneration may be revised, register records may becorrected, and so on and so forth. Ultimately, this means that the original pension
benefits are provided based on corrected records. The employer provides thefinancial resources again, here, through a special contribution fee.
5. Employer’s Obligation to Damage Compensation
Finally, this section examines whether it is possible for an employee to
23 Legge 12 August 1962 no 1338, Art 13.

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request damages from an employer when benefits have not been recoverable.
In Italy, an employer’s obligation to pay damages is already stipulated
under para 2 of Art 2116 of the Civil Code, which provides for the principle ofautomaticity.24 By this mechanism, employees are protected through the supportive
measure of damages by the employer even in cases that are omitted fromprotection by the principle of automaticity.
In Japan, there is no such stipulation. Recently, however, there have been
more cases of employees requesting damages from employers. Judicial precedents
also tend to recognize these requests in general.25 In academia, there may be
debates such as whether one should follow structures for defaulting on theirdebt or not, or for illegal behavior, but overall, there is a consensus on the coreapproach of recognizing and providing for damages.
6. Summary
This section summarizes the prevailing legal systems in both countries. First,
there is almost complete similarity in the basic rules that benefit losses will be
incurred by expiry of the period of prescription for the right to collect contribution.
Second, in both countries, it is possible to prevent losses through certain action
taken by an employee against the insurer before the end of the period ofprescription.
Third, in both countries, special legislation has systematized the recovery oforiginal benefits within a certain scope. Fourth, the employer’s obligation to pay
damages is largely recognized in the same manner in both countries.
In conclusion, we may consider the prevailing legal systems of both countries
to be largely similar.
IV. Comparing Japan and Italy, and Some Hypotheses
1. Italy, Japan, and Other Major Countries
This section offers an overall comparison of the two countries. In Italy, theideal supposes that there is no bilateral or corresponding relationship between
contribution and benefit. Indeed, in the prevailing legal system, there is a weakrelationship between contribution and benefit, with employee benefit generally
24 Art 2116, para 2, Civil Code: ‘Nei casi in cui, secondo tali disposizioni, le istituzioni diprevidenza e di assistenza, per mancata o irregolare contribuzione, non sono tenute a
corrispondere in tutto o in parte le prestazioni dovute, l’imprenditore è responsabile deldanno che ne deriva al prestatore di lavoro’ (‘In cases in which, in accordance with suchprovisions, the social security or assistance institutions are not required to pay all or part of thebenefits owed due to the non-payment or irregular payment of the contribution, theenterpriser is liable to the employee for the resulting damages’: translation by J.H. Merryman
et al, The Italian Civil Code and Complementary Legislation (New York: Oceana, 2010)).
25 For example, Nara Prefectural Court 5 September 2006 no 925, Labor case, 53 (2006).

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protected from employers not paying contribution. We may say that the ideal
and the actual legal system are consistent with each other. Meanwhile, in Japan,
while the ideal is that there is some correspondence between contribution andbenefit, the actual legal system is the same as in Italy, with the relationshipbetween contribution and benefit being weak. Here, we may say that there issome difference between the ideal and the actual legal system.
In a comparative legal study, we should be checking circumstances not onlyin these two countries, but also in other major countries, from the same
perspective. Unfortunately, however, this paper has not been able to do this.
Nonetheless, the following may be given as perceptual impressions.
First, the author has not seen the principle of ‘automatic benefit’ outside of
Italy. Italian scholars also appear to offer no indication of its existence in othercountries. This suggests that even if other countries were indeed to exhibit thesame circumstances as in Italy, it is still only in Italy that these circumstances
are clearly acknowledged and formalized as ‘principles’.
Second, as far as the prevailing legal systems are concerned, at least in EU
states, there is considerable convergence between legislation on labor and onsocial security, and there is a general tendency for worker rights to be protectedfrom an employer’s arbitrary behavior. This means that we may consider the
Italian legal system as classifying the issue as normal or standard based on theissue in question.
2. Two Hypotheses26
Considering the above premises, the first hypothesis that comes to mind isthat Japan is lagging behind. In Japan, the special treatment law in the form of
the Employee’s Pension Insurance Act was a measure cooked up owing topressure from the need to cope with pension record issues. The obligation to
pay damages placed on employers has also only come to be recognized relatively
recently through legal precedent. The prevailing legal system has finally caught
up to respond to reality. However, the ideal has not broken free from the oldform of private insurance, or from a principle of exchange. We could perhaps
think of things this way.
Another feasible hypothesis is that Italy is either an extreme or a progressive
case. In other words, even if employee benefit is protected in a similar mannerin major countries including Italy and Japan, rather than having any basis in
ideals, the main factor behind this could be responding to reality, as in Japan. If
these circumstances are indeed the results of responding to reality, it would infact be rare for ideals or principles to be acknowledged in the system, and thesituation in Japan may even be considered normal. For such a progressive
26 These hypotheses are premised on the idea that employees are generally protected inother major countries, and that the ‘principle of automaticity’ exists only in Italy. Of course,
altering these premises would enable a great number of other hypotheses.

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principle as ‘automaticity’ to be provided for in law as early as in 1942, when thevery concept of social security had not even been established, surely indicatesthat Italy is a special case. This is our second hypothesis.
3. Who Makes Contributions?
Since these two hypotheses do not necessarily contradict each other, it isalso possible that they may both stand together, that is, Italy is an extreme or
progressive case, and Japan is behind. There is also the possibility that bothcountries may exhibit some special characteristics here.
What would seem to be the key to resolving this issue is in fact the questionof who should be contributing the financial resources for social security. In
both Italy and Japan, it is the employer who is responsible for paying
contributions, and the employer pays portions for both the management andlabor. Despite this, it seems that in Japan, it is thought that insurance contributions
should ultimately be paid by the insured person themselves. This means that
there is a difference with Italy’s principle of automaticity, which discusses interms of an employer contribution obligation and an employee benefit right.27
Italy’s Civil Code is a product of the Fascist era. The socioeconomic structure ofthis era, known as corporatism (‘corporativismo’), placed special responsibilities
on employees and, in particular, on employers. It surely cannot be denied that
this has influenced circumstances in Italy. However, is this itself the reason it isthought in Italy that it is not the employee but the employer that should be
responsible for contributing financial resources? Meanwhile, in Japan, areadministrative convenience and more certain payment the only reasons why
the duty to pay contribution is assigned to the employer in legal terms, as thesituation is usually explained?
As we can see, it is not immediately obvious who is actually thought to be
the actor that should be contributing financial resources for social security.
Furthermore, there are different possibilities for different countries, not only
Italy and Japan. There is also the issue of what sort of factors lead to the spreadof these perceptions. This paper shows that there is still a lot of ground to becovered here, but also that, nonetheless, it must be seen to the end.

27 In pension systems for the self-employed, the insured persons themselves are responsible
for making contributions in both Italy and Japan. The ‘principle of automatic benefit’ does not
apply in systems for the self-employed in Italy.

Legal Families and the Birth, Growth and Death of a
Corporate Law Rule
Sean McGinty*

Abstract
This paper explores the limits of the concept of legal family in the context of corporate
law, where scholarship has given it a prominent role in explaining differences in legal
evolution. It does so by comparing the lifespan of a single rule which, owing to historicalcoincidence, Japan and Ontario both enacted in the 19th century. By examining the rule’s‘birth’ (reception), ‘growth’ (judicial development) and ‘death’ (repeal) in these jurisdictions
from different legal families, the paper highlights four factors. First is that reception of alegal system does not imply reception of a given way of regulating an issue. Second isthat convergent evolution will often lead to the development of similar interpretations ofrules regardless of legal family. Third is that legal development does not always follow
the narrative arcs assigned to given families. Finally, comparative legal elements not
captured by the legal family may sometimes better explain divergences.

I.

Introduction

This paper approaches the topic of the conference – the limits of legal
families – from the perspective of corporate law, where economists in particularhave played a major role over the past twenty years in reviving the concept tothe sometime consternation of comparative law scholars. The literature isdominated by what is often referred to as the ‘legal origins theory’1 though forconsistency in usage this paper will use the term ‘legal families’. The theory
posits that historically received legal families, through their influence on thesubstantive rules present in law, have led common law countries to better protect
shareholders than civil law countries. This in turn is determinative of certain
differences in economic outcomes which correlate with differences in legal family.
This theory set off a wave of literature which attempted to explain why legal
families would have such an effect. Early papers focused on the historical
divergences between English and French systems, with differences in politicalimperatives and degree of adaptability to change being suggested as mechanisms
through which legal families would matter.2 Given the strong degree of path
* Associate Professor of Law, Nagoya University Graduate School of Law.
1 First popularized in R. La Porta et al, ‘Law and Finance’ 106 Journal of Political Economy,
1113 (1998).
2 T. Beck et al, ‘Law and Finance: Why Does Legal Origin Matter?’ 31 Journal of Comparative2018]

Legal Families and a Corporate Law Rule160

dependence from a single historical event (a country’s reception of a given legal
system) which the theory suggested, broader studies also focused on the questionof how legal rules and economic conditions evolve over time.3 In short, thedebate sparked interest in how membership in a given legal family influences
the subsequent development of black letter corporate law, and how this in turn
relates to economic differences across countries.
This paper concentrates on the first aspect of this interest – the influence oflegal families on subsequent development of black letter corporate law – in ahitherto unexplored substantive area: the regulation of the pay of corporate
directors. While the legal origins literature has largely used a leximetric approach
involving large scale quantitative comparisons of legal rules across dozens ofcountries, this paper uses a ‘lifespan’ comparison of the main rule governing
director remuneration in two jurisdictions: Japan and the Canadian province ofOntario. In terms of legal family, Ontario is consistently classified as belonging
to the English common law system. Japan’s classification on the other hand issubject to more controversy as numerous taxonomies classify it differently but
most of its laws in the 19th century were based on German models and the legal
origins literature classifies it as German, a convention which this paper follows.
Despite their reception of different legal families, these two jurisdictions
both implemented rules on director pay in their early corporate law statutes
which were very similar to the rule found in the 1862 Companies Act in the
United Kingdom. This rule subjected the remuneration of directors to approvalby the general meeting of shareholders. The fact that both received a specificEnglish rule gives us the opportunity to test some of the underlying hypothesisof the legal origins literature based on how they subsequently developed in systems
with differing legal families. This paper traces the legislative and jurisprudential
history of the rule in these two jurisdictions from their inception in the 19th century
in order to highlight four limits in the use of legal families which are relevant at
three distinct phases of a legal rule’s lifespan: its inception, its subsequentdevelopment, and its ultimate demise or survival.
The first is that, as is perhaps obvious, membership in a legal family does
not imply the historical reception of a particular way of regulating some aspectof the corporate form. This obviously applies to Japan, which did not use the thencurrent German rule when it enacted its Commercial Code in 1899, but also to
Ontario, which only adopted one similar to that contained in the English
Companies Act several years after it had established its first corporate law using
a different model. The second is that the judiciary in both played the main rolein developing the rule, filling in gaps and providing necessary interpretations.
Economics, 653 (2003).
3 C.J. Milhaupt and K. Pistor, Law and Capitalism: What Corporate Crises Reveal about
Legal Systems and Economic Development Around the World (Chicago: University of Chicago
Press, 2008).

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The route by which they accomplished this was quite different – Ontario courts
weaving back and forth and spawning competing authorities before higher courts
settled a matter, while in Japan the courts provided interpretations in a more
direct and coherent way. Nonetheless, the development provides examples of
convergent evolution – the judiciary in each independently providing many of
the same answers to problems that arose because they were simply the best way
of doing so. Third we have the fact that sometimes legal systems act against type.
Ontario, the common law jurisdiction which the legal origins theory would holdshould have evolved rules that offered shareholders greater protection instead
abolished the rule in 1982 and removed the requirement for shareholder approval.
In Japan, on the other hand, the rule has survived to the present, giving Japaneseshareholders greater control over the remuneration of directors than those in
Ontario companies have. This brings us to the final point, which is that whilelegal family does not provide us with a useful comparative lense for understanding
this ultimate divergence of the rules, constitutional differences do. Canada’s federal
system inspired the provinces including Ontario to mimic the highly successful
Federal Canadian Business Corporations Act in the late 1970s and early 1980s,
which led to the abandonment of Ontario’s rule, while Japan, being a unitarystate, did not have its corporate law molded by such a process.
The paper proceeds to address each of these points in the lives of the rules– their ‘birth’ (taking the language of legal ‘parent’ systems literally), growth anddeath or survival – in turn. In Section 2 it provides a brief overview of the legal
families literature. Section 3 looks at the reception of the rule on director
remuneration in each jurisdiction and its initial content. Section 4 provides an
overview of how the rule was developed in the case law of each and Section 5
discusses the rule’s demise in Ontario and continued survival in Japan.
Conclusions follow.
II. Legal Families and Corporate Law
The root of the interest in legal families among economists began in the late
1990s4 with a theory that attempted to explain differences in capital market
development around the world. The earliest study created an index of legal
rights that shareholders had against directors (not including any related toremuneration) and, after quantitatively measuring them, found that countries
in the English legal family provided higher levels of protection to shareholders
than were found in the civil law families and this explained the differing levels ofcapital market development across countries. Comparative law based scholarshipfound numerous grounds to criticize this work – the use of the concept of legal

4 R. La Porta et al, n 1 above.

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families in a context to which it was ill-suited,5 bias in rule selection that favored
English law6 and simple mistaken understandings of the content of the rules inquestion7 among these. Nonetheless a follow up paper in 20088 reiterated thetheory and identified differing approaches to social control as the key which
explains the relevance of legal families.
In the meantime the need emerged to provide some theory as to why asingle event in the legal evolution of a country – its reception of a parent legal
system – would have such long lasting consequences. Historical divergences inthe early development of English and French law which resulted in the former
giving greater protection to private property rights was one explanation.9 A second,borrowing from Richard Posner’s work,10 argued that common law developedin an adaptable way, weeding out economically inefficient rules while providing
more efficient ones (which presumably protected shareholders better) over time.11
These explanations have also been met with skepticism from legal scholars.
The emphasis on long ago divergences between French and English history ignores
subsequent developments,12 and doesn’t offer a convincing explanation withregard to countries from other legal families.13 Likewise the argument that the
judicial rule making of the common law favors evolution towards efficient rules,
even if accepted as true, is not well placed in the context of the debate since
judicial rule making also occurs in most civil law countries despite the formallack of a rule of stare decisis.14 One study, looking at indices of changes in law
over time, further found that substantive legal development is not well explained
solely by reference to legal family as divergent trajectories are found within them.15
5 M. Siems, ‘Legal Origins: Reconciling Law & Finance and Comparative Law’ 52 McGill
Law Journal, 55, 62 (2007).
6 ibid.
7 H. Spamann, ‘The Ani-Director Rights Index Revisited’ 23 The Review of Financial Studies,
367 (2010).
8 R. La Porta et al, ‘The Economic Consequences of Legal Origins’ 46 Journal of Economic
Literature, 285 (2008).
9 T. Beck et al, n 2 above. See also P.G. Mahoney, ‘Legal Origin?’ 35 Journal of Comparative
Economics, 278 (2007).
10 Especially R.A. Posner, ‘Utilitarianism, Economics and Legal Theory’ 8 Journal of Legal
Studies, 103 (1979).
11 See for example T. Beck et al, n 2 above.
12 Many papers explore this point and other historical points of divergence, see for example
M.J. Roe, ‘Legal Origins, Politics and Modern Stock Markets’ 120 Harvard Law Review, 460(2006).
13 The focus on differences between the French and English systems ignores tends to
obscure the stories of Scandinavian and German families where the original data obtained by
the early literature is sometimes an awkward fit with the overall narrative, see R. La Porta et al,
n 1 above.
14 As Haley notes, ‘all legal systems adhere to judicial precedents to some degree’. J.
Haley, ‘The Role of Courts in “Making” Law in Japan: The Communitarian Conservatism ofJapanese Judges’ 22 Pacific Rim Law & Policy Journal, 491, 492 (2013).
15 J. Armour et al, ‘How do Legal Rules Evolve? Evidence from a Cross-Country Comparisonof Shareholder, Creditor and Worker Protection’ 57 The American Journal of Comparative

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Another took issue with an underlying assumption implicit in the theory thatlaws evolve gradually over time, demonstrating through the use of case studies
that law tended to evolve more rapidly in response to exogenous shocks before
returning to states of equilibrium for extended periods.16
This is by no means an exhaustive review of the literature, but it can be said
that while comparative law has been quite skeptical of this use of legal families
it does at least serve as a useful point of departure for considering their limits.
We can distill three questions which the legal origins theory suggests which thispaper explores: does legal family coincide with the reception of a given way ofregulating a given area? Does legal family provide a different way for rules to
evolve over time even if they begin the same? Does legal family lead to aparticular way of regulating something in favor of shareholders? These are
addressed in the following sections.
III. Birth: Divergences in Reception
The legal origins theory presupposes that legal families are associated with
distinctive ways of regulating economic activity.17 For the purposes of this paper
this raises the question of whether legal families have different ways of regulating
director pay in their corporate law. A comparison of Japan and Ontario suggeststhat insofar as such a style is historically determined by their reception from aparent legal family, there are limits to the usefulness of such a generalization.
If we look at the corporate laws of the ‘parent’ of each immediately prior to
the reception of their first corporate law – The United Kingdom and Germany –there are significant differences between them. In England Section 54 of theCompanies Act 186218 stated that remuneration of directors was to ‘be determinedby the company in general meeting’ – an approach which persists in English
law to this day albeit in significantly modified form in the 2006 Companies Act.
The German Commercial Code of 1897, in contrast, did not require shareholder
approval of the pay of members of the two boards which German corporations
possessed, but required that where they were to be remunerated by a share of
the profit it had to be calculated in accord with a net profit and provision of areserve fund. So far so good for the theory.
These rules, varying with each other, did not however directly find theirways into the statute books of Ontario or Japan even though both would ultimately
enact rules closer to that found in English law. Ontario’s first corporate law,
Ontario Joint Stock Companies Letters Patent Act19 passed in 1874, was broadly
Law, 579 (2009).
16 C. Milhaupt and K. Pistor, Law and Capitalism (Chicago: Chicago University Press, 2008).
17 R. La Porta et al, n 8 above.
18 25 & 26 Victoria c. 89.
19 RSO 1877, c. 150.

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similar to the first law passed at the national level, the Province of Canada’s 1864
Act to Authorize the Granting of Charters of Incorporation to Manufacturing,
Mining and Other Companies20 (‘Province of Canada Act’). Neither of these used
the Companies Act 1862 as a model however as they both adopted an earlier
letters patent based approach to incorporation. In terms of the remuneration of
directors, Section 7 of the Province of Canada Act defined the powers of acorporation’s directors and gave them the power to, among other things, passby-laws setting their own remuneration, but limited this power by stating thatsuch by-laws‘unless in the meantime confirmed at a General Meeting of the company
duly called for that purpose, shall only have force until the next Annual
Meeting of the company, and in default of confirmation thereat, shall, fromthat time only, cease to have force’.
Following Confederation this provision would be copied into Section 13 (c)of the Companies Clauses Act 21 at the Federal level.
Section 29 of the 1874 Ontario act, in a curious omission, copied the wordingof Section 7 of the Province of Canada Act almost verbatim but made no mentionof director remuneration. This oversight was remedied in the 1897 Ontario
Act,22 Section 48 of which stated:
No by-law for the payment of the president or any director shall bevalid or acted on until the same has been confirmed at a general meeting.
This led to a substantive distinction between Ontario and Canadian Federal
law since the latter acknowledged the validity of by-laws regarding director pay
until they were approved by the general meeting while the Ontario ruleestablished that shareholder approval was a condition precedent to any suchby-law coming into force.
In Japan the first permanent Commercial Code23 came into force in 1899
and included in Art 179 its original provision governing director pay:
The amount of compensation to be received by the directors is fixed by
the general meeting of shareholders if it has not been fixed in the articles ofassociation.24
German law heavily influenced the drafting of the Commercial Code,25 though
20 27-28 Victoria, c. 23.
21 32-33 Victoria, c. 12.
22 RSO 1897, c. 191.
23 Act no 48 of 9 Mach 1899.
24 English translation contained in Y.Y. Hang, The Commercial Code of Japan (Boston:
The Boston Book Company, 1911).
25 H. Baum and E. Takahashi, ‘Commercial and Corporate Law in Japan: Legal and Economic

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while the 1897 German Commercial Code was consulted it was not used as adirect model since it was felt to be too advanced for the state of the Japanese
economy of the time.26 While the rule on director remuneration bears noresemblance to the rule in the German Code it is quite similar to the rule in the
English Companies Act, the only difference being mention of the articles ofassociation (which, as they also require assent of the general meeting ofshareholders, is not a major difference).
The point to be noted about the reception though is that both Ontario andJapan found their way to enacting largely the same rule (with some differencesin wording that will be discussed further below) in rather awkward relation totheir parent. Ontario initially enacted a rule in variance with the English modeland only moved towards it decades later in a move that, ironically, marked its
divergence from the Canadian Federal law upon which it had originally been
based. Japan likewise bucked the trend of its German parent in adopting a rulethat largely followed the English model.
While this shows us a quirk in the legal family story early in each jurisdiction,
which it must be emphasized may be idiosyncratic to this particular comparison,
we can move on to the second question of how the legal systems themselves
developed the rule. Even if they both adopted the English rule, did their civil
and common law institutional mixes cause it to develop differently?
IV. Growth: The Courts and Convergent Evolution
Posner’s argument that the common law generally tends towards efficiency
has been used as one of the arguments for why rules, regardless of the historicalorigin of their substance, evolve towards greater emphasis on shareholder protection
in common law countries than civil law ones.27 This argument misses an important
point, which is that Posner and subsequent authors in that field were not referringto the ‘common law’ in comparison to civil law systems per se, but rather tojudge made rules. It’s a well established fact that the judiciaries in civil law
countries like Japan do create rules even if there is no formal recognition ofstare decisis,28 so this distinction does not tell us much. A comparison of how
the courts in Japan and Ontario interpreted their rules on director remuneration
reveals a marked contrast in the pattern of development that may be attributable totheir differing legal families, but that this was not in itself determinative of thesubstantive result.
Developments After 1868’, in W. Rohl ed, History of Law in Japan Since 1868 (Leiden: Brill,2005), 360.
26 ibid.
27 T. Beck et al, n 2 above.
28 N. Garoupa and C. Gomez Liguerre, ‘Efficiency of the Common Law’, in M. Faure and
J. Smits eds, Does law Matter? (Cambridge: Intersentia, 2011), 226.

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The rules on director remuneration in both jurisdictions, taking the Ontario
iteration that existed from 1897 to 1970 and the Japanese one which existedfrom 1899 to 2002 as a basis of comparison,29 were not exactly the same andraised some unique questions in each. The Japanese rule for example did not
specify whether the phrase ‘the directors’ meant directors individually or theboard as a whole and the courts eventually favored the latter interpretation,30
so the practice in Japan came to be for resolutions regarding director pay to ask
the shareholders to approve a global amount for the entire board rather than foreach individual director. In Ontario on the other hand the wording of theprovision made it quite clear that it applied to individual directors and thepresident, so the courts never had to address the issue.
In other respects though the provisions left the judiciary in each with manyof the same unresolved gaps that needed filling in. Was it necessary to have theshareholders approve director pay every year? Both Ontario31 and Japan32
declined to make this a requirement. This type of development can be considered aform of convergent evolution – the rules independently evolved in significantly
different contexts since they were the best suited solution to the issue at hand –forcing annual voting would have added an unnecessary formality since in bothit was possible to set limits on remuneration that would persist for multiple years.
This is illustrated in a further issue that the rule in both called up which isworth examining in greater detail. Directors in corporations also often serve as
regular employees of the corporation. The rules on director remuneration inboth however were unclear on whether shareholder approval was necessary for
all remuneration they received from the company or only that related to theirduties as directors. Interpreting it either way would pose problems. Requiring
all remuneration be subject to the rule could deprive workers of legitimate claims
to pay based on failure to meet the formalities. On the other hand, removing suchpay from being covered by the rule would create a potential loophole for directors
to avoid shareholder oversight of their pay. The judiciary in both would eventuallyfavor the latter option, the ‘directors as directors’ rule, though the development
towards that would follow different paths in each. The following subsections
trace the case law development of this interpretation of the rule in each.
1. Evolution of the Rule in Ontario
29 In 1970 the Ontario rule was updated to reflect case law developments, while in Japan a

2002 amendment did the same. In both cases the essential requirement of the rule wasunchanged by these amendments, though Ontario’s would later be repealed, see discussion below.
30 Saiko Saibansho (Supreme Court) 26 March 1985, 557 Hanrei Times 124.
31 Hood v Caldwell 1923 Canlii 3 (SCC).
32 No case challenging the lack of an annual approval reached the courts in Japan, but thepractice sanctioned by the courts from the earliest cases was to have resolutions approve a pay
limit for the entire board, which naturally lent itself to only requiring subsequent resolutions
when changes to that limit were sought. Ōsaka Chihō Saibansho (Osaka District Court) Judgment
29 June 1953, 34 Hanrei TAIMUZU 63.

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While case law related to director remuneration in Ontario first appears in
188733 it was not until 1894 that the first case in which the distinction between
remuneration for directors as directors and remuneration for the same directors
for other positions was addressed. In Re The Ontario Express and Transportation
Company34 Rose J. first articulated the directors as directors interpretation of
the rule:‘(…) I am not of the opinion that where a director is appointed an
officer of the company, he holds such appointment as director. It seems tome that the words referred to apply to the payment of money for theservices of a director qua director’.
This seemed to have settled the issue in the very first case in which it was
raised, but this iteration of the rule did not last long. Eight years later in Birneyv The Toronto Milk Co., Ltd35 Street J. expressly declined to follow it and moved
to the opposite extreme – holding that all pay to directors in any form required
shareholder approval:‘(…) we should hold the section as requiring the sanction of theshareholders as a condition precedent to the validity of every payment
voted by directors to any one or more of themselves whether under theguise of fees for their attendance at board meetings or for the performanceof any other services for the company’.
His basis for this change was the fact that the ‘directors as directors’interpretation provided an obvious loophole through which directors could
avoid the necessity of shareholder approval of their pay, by merely making theirsalary come under the guise of some other office. In Street J’s words, it ‘wouldin fact render the section nugatory, for nothing would be easier than to evade it’.
Street J’s interpretation in Birney largely supplants Rose J’s interpretationin Ontario Express and Transport as the point of departure for cases from thispoint.36 In Mackenzie v Maple Mountain Mining Co.,37 Meredith JA would
however open a wedge that would allow subsequent case law to drift backtowards the ‘directors as directors’ interpretation when he stated:‘The purpose of the enactment is that those who govern the company
shall not have it in their power to pay themselves for their services in such
33 Re Bolt and Iron Company Livingstone’s Case [1887] O.J. no 153.
34 [1894] O.J. no 179, 25 O.R. 587.
35 [1902] O.J. no 2.
36 This is illustrated in the decisions of Riddell J in the 1907 Benor v Canadian Mail

Order Co. case in which he first issued a decision reluctantly following Rose J’s interpretation([1907] O.J. no 694), then three weeks later issued a more enthusiastic decision ([1907] O.J. no740) reversing himself on the grounds that he had not known of Street J’s decision.
37 [1910] O. J. no 192, 20 O.L.R. 615.

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government without the shareholders’ sanction’.
The case did not turn on the point, but this clearly suggested that the ruleintended to draw a distinction between a director’s ‘services in such government’and other functions they might perform.
The strict approach in Birney was also applied by Riddell J in Re Morlock
and Cline Limited Sarvis and Canning’s Claims.38 There the plaintiff had only
served as a ‘dummy’ director who took no part in management and was employed
as a commercial traveller. Riddell J chose to strictly follow the rule in Birneyand deny the claim for pay on the basis that‘(…) the law does not draw any distinction between ‘dummy’ and nondummy directors – and one who has accepted the position of director must
continue to be so dumb that he cannot say he was not a director – it would
never do to allow a director to better his position by asserting that he did
not do his duty as director’.
The pushback against this strict interpretation and a move back towards
the directors as directors interpretation began in 1912 with Matthew Guy Carriage
and Automobile Co. (Re).39 In this case the plaintiff was a mechanic who
worked as such for the company and was later appointed to the board. Since his
pay as mechanic under his employment contract had not been put into a by-law
and passed by the shareholders the court had to consider whether he had any
claim to such pay. Relying on his own statement in Mackenzie v Maple
Mountain Mining Co. Meredith JA explicitly established that the rule did not
apply to regular employment positions whose appointment did not require aby-law. He expressed some wariness in light of the Bliney decision but held that
‘I do not think that there is any warrant for extending the principle tocases in which the director has acted as a mere workman or clerk and has
been remunerated at a rate not exceeding the real value of the services
rendered, at the ordinary market-price’.
This new distinction was elaborated in the Ontario Supreme Court in 1918.
In Canada Bonded Attorney and Legal Directory v Leonard-Parmiter Ltd.,40
Ridell J held:‘If the services are such that only a director can perform them, eg,
attending board meetings or acting in other regards as a director, he canrecover compensation, payment, for such services, only by complying withthe statute; but, if he is employed in a subordinate capacity and at a38 [1911] O.J. no 115.
39 [1912] O.J. no 136.
40 [1918] 42 D.L.R. 342.

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reasonable figure, there is no necessity for a by-law confirmed at a general
meeting’.
In 1919 the Supreme Court of Canada finally had its say on the rule. Anglin
J settled the matter in favor of the ‘directors as directors’ rule, citing withapproval Middleton J in the Matthew Guy Carriage and Automobile Case and
Riddel J in Canada Bonded Attorney.41 He held:‘The commission was not paid to Doran as a director of the company,
but as an agent employed by it to sell its property. I think such a payment
does not fall within Section 92 of the Ontario Companies Act (…).’
Duff J (dissenting on other grounds) also stated:‘(…) I am inclined to concur in the view that this section does notcontemplate special payments of the character here in question which are
not made by way of remuneration for services of a director as director, buta special allowance on some other ground’.
It remained unclear whether these statements actually settled the matter
since neither represented the majority opinion (concurring judgments having
avoided addressing the issue and deciding the case on other grounds) and thisuncertainty was commented on, but not resolved, by Anglin J five years later in
Hood v Caldwell.42 Despite this, the Supreme Court’s decision did have theeffect of ending judicial decisions on the issue in Ontario Courts, as no further
cases on this point appear afterwards. The Ontario legislature put the final wordon the matter by codifying the ‘directors as directors’ rule in its 1970 overhaul of
the Companies Act.43
2. Evolution of the Rule in Japan
Owing to the limited availability of pre-war Japanese decisions 44 ourdiscussion of the jurisprudential story there begins in the post-war period. The
case law related to its director remuneration rule, then found in Art 269 of theCommercial Code,45 begins in 1953 in the Osaka District Court,46 where mostlitigation related to it played out until the 1980s, by which time it had largely
41 [1918] 42 D.L.R. 342.
42 [1923] S.C.R. 488.
43 R.S.O. 1970 Ch. 53.
44 The main commercial Japanese case law databases which were consulted for thispaper, Westlaw Japan and LexDB, have coverage only extending to the postwar period.
45 Until 2005 since when it has been in Art 361 of the Companies Act, Act no 86 of 26 July
2005.
46 Ōsaka Chihō Saibansho (Osaka District Court) Judgment 29 June 1953, 34 Hanrei
Taimuzu 63.

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Legal Families and a Corporate Law Rule

170

migrated to Tokyo. Unlike Ontario, where the earliest decision formulated the
directors qua directors rule and subsequent decisions waved back and forth
between opposing viewpoints before decades later returning the rule to one
quite similar to that at which it started, the directors as directors rule would notsee its first iteration in Japanese case law until 1985.
This difference is partly explained by differences in the corporate frameworkthat the Commercial Code set. In keeping with its German origins the Commercial
Code gave corporations not one but two boards: a board of directors(torishimariyaku) and a board of auditors (kansayaku). The board of directors
was tasked with administering the affairs of the corporation, while the board ofauditors played a monitoring role over the board of directors and was tasked
with examining and investigating the documents of the directors and making
reports regarding such to the shareholders.
Art 269 applied not only to the remuneration of directors, but also to that ofauditors, which created a governance problem. Since resolutions regarding pay
were submitted to the general shareholders meeting by the board of directors,
this allowed the directors to set and request shareholder approval not only for
their own pay levels but also those of the auditors, the very people tasked withsupervising them.
The Osaka District Court in 195347 first had to deal with a case in which ashareholder, among other things, sought to invalidate a resolution which approveda change in the articles of incorporation to increase the pay of the board of
directors and the board of auditors. The source of the Plaintiff’s claim may havelaid in the fact that the corporation’s main asset, a hotel in Osaka, was being
used by the American occupation authorities at the time of the resolution whichmeant that there was little work for the directors to be doing that would havejustified a raise.
More specifically though the Plaintiff had two legal bases for seeking
invalidation which were not relevant in Ontario. The first was that allowing thepay of auditors to be set alongside that of directors at the latter’s motion seriously
undermined the ability of the auditors to perform their function. The second
was that the resolution did not actually set the pay of the directors or auditors
individually, but rather set a cumulative pay limit for each board as a whole.
While the wording of the Ontario statute made it clear that the pay of individual
directors had to be approved by the shareholders, the Japanese rule was morevaguely worded in this respect and open to interpretation. The delegation ofdecisions on how to divide pay to the board of directors was particularly
problematic in light of Arts 260 and 262 of the Code, which prohibited directors
from voting on resolutions of the board in which they had a personal interest.
Since all directors would obviously have an interest in their own pay, this rule
seemed to disqualify them from making such decisions.
47 ibid.

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The Court made a number of pronouncements that, despite coming from alower court, would be followed thenceforth. The first was the observation thatthe purpose of Art 269 was the need to prevent the directors from having
unfettered discretion to decide their own pay since they might abuse that to pay
themselves in excess of their worth to the detriment of the company. The
second was to establish that resolutions did not have to approve the pay of eachindividual director but rather could set a global limit for the entire board tomeet the requirements of Art 269. The third was that the pay of auditors could
be set by the same resolution as the directors.
In 1968 the first case 48 to deal with the distinction between pay fordirectors in their roles as directors and that in their roles as employees appears.
This case, which first arose in the Nagoya District Court and was appealed up to
the Supreme Court of Japan, dealt with employee-directors who had not been
paid as directors but rather had all of their earnings come from their employment.
The main issue was not related to Art 269 but rather to Art 265 of the Code,which required that any contract which a director enters into with the corporation
on his or her own behalf must be approved by the board of directors. The Court
held that‘when a director of a corporation also holds a position as an employeeof the corporation, the remuneration that person receives as an employee,rather than as a director, should be interpreted as being remuneration paid
under a contract between that director and the corporation, which must be
approved by the board of directors pursuant to Art 265 of the Commercial
Code’.
The Court’s narrow answer to the question in the case avoided addressing
whether this pay also needed to be approved by the shareholders pursuant to
Art 269. It did, however, establish a precedent for differential treatment of adirector’s pay in each role.
The case law then returns to the District courts for several years. In one
1973 case the Osaka High Court49 issued a decision which went the opposite
direction from Riddel J’s famous line about dummy directors in Ontario sixty
years earlier. There the Court upheld the Plaintiff’s claim to a retirement bonus
despite the fact that she had been a director of the corporation and the bonus
had neither been approved by the shareholders nor the board of directors. It
held that since she held the position of director in name only (in other words,
she was a dummy director) at a closely held corporation where the formalities
were largely ignored, the concerns related to protecting the corporation from48 Saikō Saibansho (Supreme Court 3rd Petty Bench) Judgment 3 September 1968, 92

Hamji Shumin 163.
49 Ōsaka Kōtō Saibansho (Osaka High Court) Judgment 29 March 1971, 298 Hanrei
Taimuzu 227.

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Legal Families and a Corporate Law Rule172

damages which were behind both Arts 265 and 269 were not in play.
A 1972 Osaka District Court case50 provides a further exploration of the
distinction between pay for directors and pay for employees. The Plaintiff inthat case had been receiving pay as a director that had been duly approved by
the shareholders as required by Art 269. He suffered an injury which prevented
him from attending at the corporations (he was the director of two related
corporations which were both defendants), after which they stopped paying
him as a director even though he continued to hold that position. The Court, in
upholding the Plaintiff’s claim for pay, noted that corporation had erred in treating
the position of director as one of an employee. Since the Plaintiff still had theduties of a director despite his injury, he continued to be entitled to pay as such.
In 1985 the Supreme Court of Japan in the Citizen’s Watch case51 was thefirst, and last, to directly deal with the question of whether the rule on director
remuneration contained in Art 269 covered payments for non-director duties.
In a short one page judgment which upheld the decision of the Tokyo Court, theCourt held:‘Where the system for establishing employee pay is clearly established,
it cannot be said that a resolution of the general shareholders meeting
which sets only their pay as directors is insufficient to allow the generalshareholders meeting to perform its oversight function and determine
whether or not the actual pay of directors is excessive. Therefore such aresolution does not fail to comply with the requirements of Article 269 of
the Commercial Code’. (Author’s translation)
Of note is that the Court used a very similar device as the Ontario courts toassuage the danger that the directors as directors rule would provide an avenue
for directors to avoid shareholder scrutiny. The requirement that such pay besubject to a clearly established pay system was the functional equivalent ofMeredith JA’s requirement that the remuneration not exceed ‘the real value ofthe services rendered’52 for the directors as directors rule to apply. By insertingthat objective standard, the courts found a balance that prevented directors fromabusing their position to overpay themselves free from shareholder oversight
while at the same time reducing the formalities that might have frustrated valid
claims for work performed. With this single judgment the issue was resolved inJapan and does not appear in further cases involving Art 269.
The comparison of how the courts in Ontario and Japan developed the rule
50 Ōsaka Chihō Saibansho (Osaka District Court) Judgment 21 December 1972, 298

Hanrei Taimuzu 414.
51 Saikō Saibansho (Supreme Court 3rd Petty Bench) Judgment 26 March 1985, 557
Hanrei Taimuzu 124. The author’s English translation of the Supreme Court of Japan andTokyo High Court decisions in the case can be accessed here https://tinyurl.com/y8rhuuj8(last visited 15 November 2018).
52 Matthew Guy Carriage and Automobile Co. (Re) n 39 above.

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shows us both that they followed different paths of development and that thisdifference doesn’t seem to have had much effect on actual substance. The backand forth between competing lines of authority in Ontario courts as they narrowed
the question of how to treat pay directors receive from regular employment
through multiple factual cases over decades has no parallel in Japan, where
specific questions like that were settled directly the first time they appeared. In
both however the courts hit upon largely the same interpretation of the rule andthe same way of resolving the underlying problem it posed.
V. Death and Survival: The Rule Ends with a Whimper in Ontario,
Japan Carries On
In 1970 Ontario’s Corporations Act underwent a large scale reform following
the release of the Lawrence Report that had been commissioned by the Legislative
Assembly in 1967.53 The rule on director remuneration was revised to codify the
directors as directors interpretation and further clarify the content of by-laws on
director remuneration but otherwise made no changes to it.54 The rule would
however find the seeds of its demise with movements at Canada’s Federal level
shortly thereafter. Federal corporate law, which as noted above had diverged
from Ontario’s in the 19th century, gave directors the discretion to set their own
pay. 55 In 1975, following the recommendations of the Dickerson Report of1971,56 Parliament enacted the Canada Business Corporations Act (CBCA).57 The
introduction of the CBCA had a major impact on corporate law across allprovinces, which until that point in history had been quite diverse. Within adecade nine out of ten provinces had completely reformed their corporate laws
based on the CBCA model.58 Ontario did so in 1982 Ontario by enacting acompletely new Corporations Act59 almost entirely based on the CBCA, including
its provision on director remuneration. This marked the end of director pay
being subject to approval by the general shareholders meeting in Ontario, asituation that continues to this day.
53 Ontario Legislative Assembly, 1967 Interim Report of the Select Committee on Company
Law, 5th Session, 27th Legislature 15-16 Elizabeth II.
54 The amended rule stated:
22 (1) A by-law relating to the remuneration of a director as director shall fix theremuneration and the period for which it is to be paid.
(2) A by-law passed under subsection (1) is not effective until it is confirmed at a general
meeting of the shareholders duly called for that purpose.
55 Section 94 Canada Corporations Act, 1964-65 c. 52, s. 1.
56 R.W. Dickerson et al, Proposals for a New Business Corporations Law for Canada(Ottawa: Information Canada, 1971).
57 R.S.C. 1985 c. 44.
58 R.J. Daniels, ‘Should Provinces Compete? The Case for a Competitive Corporate Law
Market’ 36 McGill Law Journal, 130, 152 (1991).
59 Business Corporations Act, 1982, SO 1982, c. 4.

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Legal Families and a Corporate Law Rule174

This divergence of Ontario’s law from Japan’s and a path it had followed for
close to a century is notable for two reasons. The first is that it occurred as asmall part of a much larger reform in which it was not viewed as significant.
Neither the Lawrence Report or the Dickerson Report devoted any discussion
to the rules on director remuneration. The second and more important is thatthe divergence with Japan is clearly not explained by legal family. The creationof the CBCA in 1975 was a watershed moment in the development of corporate
law across all jurisdictions in Canada, which responded to perceived competitive
pressures it created and modelled what until then had been quite diverse
corporate rules on it.60 Japan’s solitary Commercial Code (and from 2005
Companies Act) was not subject to any such interjurisdictional competition or
diversity in rules and the general shareholders meeting still has the final say on
the remuneration of directors at most Japanese companies.61 Constitutional
differences rather than legal family offers a better comparative explanation for
this, ultimate, divergence.
VI. Conclusion
To return to the overall topic which the paper began with – the limits oflegal families – the comparison of the lifespan of the same corporate law rule injurisdictions from differing legal families provides us with some insights thatthe larger scale, quantitative studies which dominate the legal origins literature
miss out on. The first is that historical receptions of legal families did not always
imply the reception of a given substantive rule. The second is that subsequentdevelopment of rules by the courts might vary in style across legal families, butalso show signs of convergent evolution – rules by their nature offer limited
potential interpretations and courts may often independently hit upon the sameones regardless of other differences. Third is that jurisdictions may act against
type, with common law jurisdictions abandoning shareholder protections thatcivil law ones maintain. Finally we have the fact that other comparative legal
differences not captured by the concept of legal family, such as constitutional
ones, may offer better explanations for such divergences in the evolution of
corporate laws in some instances.
This is not to suggest that these results are likely to be repeated acrosscomparisons of different rules in different jurisdictions, clearly much of this is
idiosyncratic to the comparison here presented. The point, however, is that the
60 R.J. Daniels, n 58 above.
61 Since 2002 an exception has been made for companies which adopt the Companies

with Committees system, but this only represents about two percent of listed corporations. See
D. Green and S. McGinty, ‘What Shareholders in Japan Say about Pay: Does Art 361 of Japan’sCompanies Act Matter?’ Asian Journal of Comparative Law, 1-31 (2018).

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lifespan of a black letter law provides so many points for divergence in theirbirth, growth and death that the concept of legal families is of limited use inunderstanding the substantive differences that exist across countries today.

Is the CISG a Useful Tool for the Interpretation of the
Newly Reformed Minpō?
Franco Serena

Abstract
In this article I am considering the role of the CISG in interpreting the recently
reformed Minpō, the Civil Code of Japan. The Minpō was promulgated by the end ofnineteenth century and had never experienced a real structural reform. However, on 26
May 2017, the National Diet of Japan approved a radical reform of the Minpō. This reform
seems to have been fostered by the success of international rules like the CISG, which Japan
ratified in 2008. In this paper, taking as an example the issue of non-conformity of goods,
I will try to verify how much the reformed Minpō got close to the CISG. Following, I will
try to find whether the CISG can be a useful interpretation tool for the reformed Minpō.

I.

Introduction: How to Regulate an International Sale

An international sale of goods is not different from a domestic one in its
essence. In fact, a sale of goods, wherever the parties usually have their place ofbusiness, consists primarily in the transfer of property from the seller to the buyer
on one hand and in the payment of the price by the seller on the other hand.
However, a sale of goods that is international, meaning a transaction thatcrosses one or more States, is different in some ancillary aspects from a domestic
one. In fact, it is usually a transaction that requires a carriage contract to coverlong distance transports and involves a considerable number of parties situatedin different countries. This raises the possibility of a suit in a foreign court about
an export license or an involvement in a foreign State political turmoil1 or evena foreign governmental intervention of which the parties to a sale contract may
not be aware. However, more fundamentally, an international sale of goods ismade between parties with different legal cultures or different sensibilities
about a particular legal concept. For instance, according to the Italian Civil Code
(Codice Civile), a valid contract is concluded in the presence of a common will of
two or more parties (Art 1321), a social function (the concept of Causa), a lawful
object (Oggetto) and in some cases a written form as established on Art 1325.2


PhD Candidate in Private Law, Keiō University.

1 H.J. Berman and C. Kaufman, ‘The Law of International Commercial Transactions (Lex

Mercatoria)’ 19 Harvard International Law Journal, 221, 222 (1978).
2 V. Roppo, Il Contratto (Milano: Giuffrè, 2011), 311.

2018]CISG and the Interpretation of the Reformed Minpō

178

On the other hand, Japanese Law establishes that a contract is ‘concluded’ with thecommon will of two parties and in some cases a written form or the delivery of
the object of the contract.3 How do we regulate these differences between theparties?
These differences can be managed by the parties themselves under the ruleof freedom of contract by providing in the contract with the solution to all
aspects of the transaction. This brings certainty to the parties and permits adjusting
the contract to their special needs. However, the parties may not be able to provide
for all possible situations arising from an international contract’s problems. Therecan be a case where they must defer conflicts to the domestic legal system of theparties or to a third neutral system. This can bring about uncertainty to theconsequences of parties’ actions because the parties may not know each other’s
law system or the third country’s legal system they may have chosen. In addition,
domestic law is more focused on an internal perspective and thus cannot always
be ready to the commercial needs of international transactions.
Therefore, the idea of a set of common rules to regulate these transactions.
This may eliminate the differences between different domestic legal systems andapply to the needs of a trade that is international. This was UNCITRAL’s purpose
in drafting the Convention on International Sale of Goods in 1980 (CISG).4 The
Convention is the result of almost fifty years of work and is now considered asuccessful international law5 considering the large number of ratifying States
including Italy (11 December 1986) and Japan (1 July 2008). CISG is especially
useful given the huge quantity of the scholarly material about its interpretationand jurisprudence from all over the world applying its provisions.6
This success also made this set of rules a source for domestic law reform
attempting to adapt domestic law to present globalized trade.7 For example, theMinpō, the Japanese civil code, was recently reformed after over a hundredyears. The property law was promulgated in 1896, and the succession law in1898. The Minpō had not had a large-scale reform even after the promulgationof the new Constitution in 1947. As a result, in October 2009 the Minister ofJustice of Japan created a subcommittee within the Legislative Council (Hōsei
Shingi kai) tasked with preparing a draft for the future reform of the Minpō.
After more than five years, this subcommittee approved a document containing
3 S. Wagatsuma, Saiken Kakuron Jōkan (Minpō Kōgi V1) (Tōkyō: Iwanami Shoten,1954), 54-55; E. Hoshino, Minpō Gairon IV (Keiyaku) (Tōkyō: Ryōshofukyūkai, 197576), 25; Y. Shiomi, Kihon Kōgi – Saiken Kakuron (Tōkyō: Shinseisha, 3rd ed, 2017), 17-18.
4 M.J. Bonell, ‘Introduction to the Convention’, in C.M. Bianca and M.J. Bonell eds,
Commentary on the International Sales Law (Milano: Giuffrè, 1987), 9.
5 I. Schwenzer, ‘Introduction’, in I. Schwenzer ed, Commentary on the UN Convention on
the International Sale of Goods (CISG) (New York: Oxford University Press, 4th ed, 2015), 1.
6 S. Kröll, L. Mistelis and P. Perales Viscasillas, ‘Introduction to the CISG’, in S. Kröll, L.
Mistelis and P. Perales Viscasillas eds, UN Convention on Contracts for the International
Sale of Goods (Portland: Hart Publishing, 2nd ed, 2018), 12-15.
7 I. Schwenzer, n 5 above, 10.

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the guidelines for the reform of the obligations part of the Minpō (Minpō no
Kaisei ni Kansuru Yōkō An). After the approval of these guidelines by theLegislative Council on February 2015, the draft was received by the Cabinet andsubmitted to the National Diet which approved the draft on 26 May 2017.8
One of the main reasons for this reform seems the favorable opinions
expressed to CISG by a large number of States.9 Thus, in interpreting the reformed
the Minpō we can consider the CISG as a reference.
How close did the Minpō get to the CISG?
In this paper, first I will consider the original idea that prompted the CISG
rules and drafting history as well as its features as a common rule for theinternational sale of goods. As an example, I will refer to the issue of nonconformity of goods. Second, I will consider how the conformity of goods
provisions in the Minpō changed with the reform and the similarities to the
CISG. I will also discuss whether the CISG can be considered an interpretation
tool for these new provisions.
II. CISG as an Expression of the Modern Lex Mercatoria
1. The Ancient Lex Mercatoria
The idea of using a set of common rules for a transnational commercial
transaction is not a recent one. In the 11th and 12th centuries, Europe experienced acommercial renaissance associated with the opening of trade with the marketsof the East and general political and economic developments, including thedevelopment of agriculture, the rise of towns and cities as autonomous politicalunits and the consequent birth of the merchant class.10 This growth of commerce,
together with the revival of law study in the universities and the growth of legal
systems, contributed to the development of the Lex Mercatoria. This law governed
only transactions between merchants in fairs, markets and seaports and it was
distinct from local, feudal, royal or ecclesiastical law. Its special features consisted
in the transnational character of its provisions. Its principal source was mercantile
customs. It was administered not by professional judges but by merchantsthemselves. Its procedure was speedy and informal, and it stressed equity as anoverriding principle.11
Later, in the 17th and 18th centuries, the rise and development of Nation State
led to the nationalization of Lex Mercatoria. This brought clarity of rules at thedomestic level regarding sales; at the same time, it made Lex Mercatoria lose
its original flexibility. Then, the spreading of legal positivism in 19th century
8 T. Tsutsui, ‘Saikenhō Kaisei no Ikisatsu to Gaiyō’ 1511 Jurist, 16-17 (2017).
9 H. Nakata, Keiyakuhō (Tōkyō: Yūhikaku, 2017), 5-6.
10 J.H. Berman, Law and Revolution (Cambridge, Massachusetts and London, England:
Harvard University Press, 1983), 333-336.
11 ibid 339-356.

2018]CISG and the Interpretation of the Reformed Minpō180

made international transaction be subjected only to domestic laws.12
Nonetheless, the merchant class kept on producing its own rules in form ofstandard contracts and private regulations.13 In the 20th century, with the flourish
of international transaction, we find, just like the Lex Mercatoria in the Middle
Ages, a new research for a common ground in international sales by means of abody of law reflecting the customs, usages and needs of international trade.
UNCITRAL’s 1980 Convention on the International Sales of Goods can beviewed as an expression of this tendency.14
2. CISG Drafting
The idea of an international convention regulating international sales dates
back to 1929. In that year the International Institute for the Unification of Private
Law (UNIDROIT) undertook the task of preparing such an international
convention. After many years of drafting, in 1964 the Uniform Law for theInternational Sale of Goods (ULIS) and the Uniform Law for the Formation ofContracts for the International Sale of Goods (ULF) were finalized. However, theircontent was considered too close to continental law codification and too abstractand dogmatic.15 In the end only nine countries adhered to those Uniform Laws.16
As a result, soon after the finalization of ULIS and ULF, the United Nations
Commission on International Trade Law (UNCITRAL) established a working
group of fourteen States to ascertain which modifications of ULIS and ULF might
render them capable of wider acceptance by countries of different legal, socialand economic systems.17 The working group completed its work in 1978 and theGeneral Assembly of the United Nation authorized the convening of a diplomaticconference to finalize the conventions which in the meantime had been combined
into a single draft. In March 1980, representatives of sixty-two States18 and eightinternational organizations met at a Conference in Vienna to finalize theConvention.19
At the end of the conference, the draft was voted on a plenary session article byarticle, each article requiring approval by a two-third majority. Out of eightyeight substantive articles of the CISG, seventy-eight of them were approved
unanimously and eight additional articles received no more than two negative
12 M. Yamate, ‘Lex Mercatoria Nitsuite no Ichikōsatsu (1)’ 33-3 Hōzatsu, 342, 360-363 (1987).
13 ibid 363-364.
14 K.P. Berger, The Creeping Codification of Lex Mercatoria (The Hague: Kluwer Law
International, 2nd ed, 2010), 60.
15 M.J. Bonell, n 4 above, 17.
16 I. Schwenzer, n 5 above, 1.
17 J.O. Honnold, ‘The 1980 Convention: A Brief Introduction’, in H.M. Flechtner ed, Uniform
Law for International Sales Under the 1980 United Nations Convention (Alphen aan den Rijn:
Kluwer Law International, 2009), 9.
18 Participating States consisted in twenty-two delegations from western developed worlds,
eleven from socialist regimes, twenty-nine from Third World countries.
19 M.J. Bonell, n 4 above, 3-7.

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votes. All the other articles were approved by large majorities or approved
without dissent after a revision ad hoc.20
This process, at first sight so peaceful by the numbers, was not without any
kind of sacrifice. The CISG’s scope of application is limited to sales of movable
goods made for business purpose (Art 2). Moreover, CISG doesn’t regulate all
the aspects of a sale of goods contracts but only the formation and the obligationsof the seller and the buyer, explicitly excluding instances about the validity ofcontract or the effect the contract may have on the property in the goods sold(Art 4). In addition, we can see that some provisions seem more like a compromise
as they do not give a clear solution.21 For instance, some of CISG provisionsdelegate the matter at hand to national courts like the case of the remedy of
specific performance (see Art 28). Otherwise, the provision establishing the rules
for exemption in damages (Art 79), does not make clear if its scope of application
extends to hardship cases.22
Nevertheless, the CISG does give a common ground for an important portionof international sales by providing rules that are supposed to be understood andapplied in the same way in CISG-member States and are, at the same time,
tailor-made for international sales needs. But how the CISG does concretely
regulate international sales?
One example can be found in how the CISG tried to create a common rule
regarding the non-conformity of goods in international trade.
3. CISG Content: The Example of Non-Conformity of Goods
The CISG’s drafters had to take account of and find a common core among
all the domestic laws of the delegates in order to create transnational provisions
to regulate international sale of goods.23 In the case of the non-conformity ofgoods provisions, for instance, one can see two traditional approaches when
considering continental law and common law.24 On continental law side, we
usually find a two-tier approach inspired by the Roman law-model consisting ofa set of specific rules, parallel to the general law of breach of contract, with theirown remedies creating a statutory liability for the seller about quality issues. For
instance, the Italian Civil Code, together with the general liability for breach of
20 J.O. Honnold, n 17 above, 5-12.
21 G. Eorsi, ‘A Propos the 1980 Vienna Convention on Contracts for International Sale ofGoods’ 31 The American Journal of Comparative Law, 333, 345, 353-356 (1983).
22 On this aspect see I. Schwenzer, ‘Article 79’, in I. Schwenzer ed, Commentary on the
UN Convention on the International Sale of Goods (CISG) (New York: Oxford University Press,
4th ed, 2015), 1142-1143; D. Tallon, ‘Exemptions’, in C.M. Bianca and M.J. Bonell eds, Commentaryon the International Sales Law (Milano: Giuffrè, 1987), 591-595; J.O. Honnold, ‘Exemptions’,in H.M. Flechtner ed, Uniform Law for International Sales Under the 1980 United Nations
Convention (Alphen aan den Rijn: Kluwer Law International, 2009), 627-630.
23 M.J. Bonell, n 4 above, 9.
24 P. Hubner, ‘Comparative Sales Law’, in M. Reiman and R. Zimmerman eds, The Oxford
Handbook of Comparative Law (New York: Oxford University Press, 2006), 956-960.

2018]CISG and the Interpretation of the Reformed Minpō

182

contract (Arts 1218, 1453 and following), establishes a special liability for theseller regarding the quality of the goods in a sale for latent defects (Art 1490),
lack of expressed or essential qualities (Art 1497) and bad functioning of goods(Art 1512). Also, there is a category created at a jurisprudential level: the delivery ofdifferent goods (aliud pro alio datum).25 The remedies for these issues are astrict liability in terms of contract termination and reduction of price remedies
and a fault liability in terms of damages. 26 However, the problem with thisapproach is the difficulty in drawing a line between the two systems since a lackof quality can even be considered just a breach of contract.27
On the other side, we have a unitary approach typical of Common law
systems in which the quality issues are resolved within the system of the generalrules of breach of contract. For instance, Section 14 of the UK Sale of Goods Act(1893) focuses on the terms of contract and specifically whether they are
warranties – which gives the buyer title to claim only damages – or conditions,giving to the party claiming non-conformity the right to terminate the contract.
In this situation, the CISG drafters decided to adopt a uniform notion oflack of conformity establishing that‘the seller must deliver goods which are of the quantity, quality anddescription required by the contract and which are contained or packaged
in the manner required by the contract’ (Art 35.1).
In doing so, the CISG tries to avoid any local concept potentially menacing
the international interpretation of its dispositions and creates a common
concept of non-conformity within the system of breach of contract.28
In addition, the CISG had another task: creating rules for the good of a salethat is international in its nature. In this context, considering – for instance –the expenses and the risk concerning a sale that is international compared to adomestic one, the CISG tries to favor the valid existence of the contracts against
its premature termination on the initiative of one of the parties, the so-calledfavor contractus principle.29 Regarding non-conformity of goods, CISG may
allow voiding the contract for a lack of quality or quantity only if it amounts tofundamental breach of contract, that is if the non-conformity destroys the core
25 A. Luminoso, ‘Vendita’, in R. Sacco ed, Digesto delle discipline umanistiche – Sezione
Civile (Torino: Utet, 1999), XIX, 645.
26 ibid 647-648.
27 P. Hubner, n 24 above, 957.
28 I. Schwenzer, ‘Article 35’, in I. Schwenzer ed, Commentary on the UN Convention on
the International Sale of Goods (CISG), 593.
29 B. Keller, ‘Favor Contractus: Reading the CISG in Favor of the Contract’, in C.B. Andersenand U.G. Schroeter eds, Sharing International Commercial Law across National Boundaries:
Festschrift for Albet H. Kritzer on the Occasion of his Eightieth Birthday (London: Wildy,
Simmons & Hill Publishing, 2008), 249, 254-257; H. Sono, ‘Favor Contractus no Variēshon’, in
H. Matsuhisa et al eds, Minpogaku ni okeru Koten to Kakushin (Tōkyō: Seibundō, 2001), 258264.

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The Italian Law Journal[Special Issueof the reciprocal exchange.30 Unless that point is reached, the CISG tries torestore balance in the contractual relationship between the parties giving a set of
remedies to the buyer. Specifically, if the lack of conformity concerns quantity,
the buyer may demand delivery of the missing quantity (Art 51.1, Art 46.1) andif the lack of conformity takes another form like wrong quality or wrong
delivery, the buyer has the right to require a delivery of substitute goods but
only if the lack of conformity amounts to a fundamental breach of contract (Art46.2). In addition, the buyer can even require the reparation of goods unless it
unreasonable to do so (Art 46.3) and he has anyway right to price reduction
under Art 50 and to damages under Art 74.31
So, as can be observed from the content of Art 35, the CISG drafters tried tolook for transnational provisions and fit them to international transactions
needs. These drafting efforts made good results: the CISG nowadays represents
one of the most successful conventions made by UNCITRAL with at present
eighty-nine countries as contracting states.32 In addition, many States used
CISG as a model to reform their domestic sales law,33 including Japan in the
recent reform of the Minpō in areas like the non-conformity of goods provision.
III. Non-Conformity of Goods in the Minpō
1. The Pre-Reform Minpō
The pre-reform Minpō regulation about non-conformity of goods is very
similar to the Italian system mentioned above in adopting the two-tier approachinspired by Roman law model.34
In fact, according to general rules of sales contract in the present Minpō, avalid sale contract consists in the obligation of the seller to transfer to the buyer
the property of the subject matter of the contract and, on the other hand, theobligations of the buyer to pay the price for it (Art 555).35 Then, according thengeneral rule, reciprocal obligations arising from a contract must be consistent
with their purpose (Art 415).36 Thus, a case of non-conformity of goods in terms
30 For some leading cases on conformity of goods on fundamental breach see, in Germany,

Bundesgerichtshof, 3 April 1996, available at https://tinyurl.com/y78n73ya (last visited 15
November 2018) (Cobalt Sulphate Case) and, in the United States of America, Federal
Appellate Court (2nd Circuit) Rotorex Corp v Delchi Carrier, 6 December 1995.
31 I. Schwenzer, n 28 above, 616-617.
32 https://tinyurl.com/585fw5 (last visited 15 November 2018).
33 I. Schwenzer, n 28 above, 593．
34 K.Yuzuki and T. Takagi, Shinpan Chūshaku Minpō (14) (Tōkyō: Yūhikaku, 1993), 260-261.
35 Art 555: ‘A sale shall become effective when one of the parties promises to transfer acertain real right to the other party and the other party promises to pay the purchase money forit’. Taken from Japanese Law Translation Database System Copyright © 2018 Ministry ofJustice, Japan, available at https://tinyurl.com/y9ry6cu6 (last visited 15 November 2018).
36 Art 415: ‘If an obligor fails to perform consistent with the purpose of its obligation, theobligee shall be entitled to demand damages arising from such failure. The same shall apply in2018]CISG and the Interpretation of the Reformed Minpō

184

of quality or quantity can be seen at first as a performance ‘not consistent withthe purpose of the obligation’. That entitles the buyer to the usual remedies forbreach of contract as damages (Art 415), termination of contract after a reasonable
period to perform (Art 541)37 and specific performance (Art 414.1).38 39
However, Arts 560-570 of the present Minpō provides a set of special
liabilities for defects in sale contracts parallel to the remedies for general breachof contract. First, Art 56540 provides a seller’s special liability on lack of quantity
established in the contract applying mutatis mutandis the remedies in Art
56341 and Art 564.42 Secondly, Art 57043 establishes a seller’s special liability for
latent defects (kakureta kashi) on the subject matter of the sales contract.
According to Art 570, in presence of functional or qualitative lack in the subject
matter of the sales contract the existence of which cannot be realized by areasonable person,44 the buyer is entitled to damages or contract termination
with no additional time period but the latter is possible only if the purpose ofcases it has become impossible to perform due to reasons attributable to the obligor’. Japanese
Law Translation Database System Copyright © 2018 Ministry of Justice, Japan. All Rights
Reserved, available at https://tinyurl.com/y9ry6cu6 (last visited 15 November 2018).
37 Art 541: ‘In cases where one of the parties does not perform his/her obligations, if theother party demands performance of the obligations, specifying a reasonable period and no
performance is tendered during that period, the other party may cancel the contract’. Japanese
Law Translation Database System Copyright © 2018 Ministry of Justice, Japan. All Rights
Reserved, available at https://tinyurl.com/y9ry6cu6 (last visited 15 November 2018).
38 Art 414.1: ‘If an obligor voluntarily fails to perform any obligation, the obligee may
request the enforcement of specific performance from the court; provided, however, that, thisshall not apply where the nature of the obligation does not permit such enforcement’. Taken
from Japanese Law Translation Database System, Copyright © 2018 Ministry of Justice,Japan. All Rights Reserved, available at https://tinyurl.com/y9ry6cu6 (last visited 15
November 2018).
39 T. Uchida, Minpō II (Tōkyō: Tōkyō Daigaku Shuppankai, 3rd ed, 2011), 125.
40 Art 565: ‘The provisions of the preceding two Articles shall apply mutatis mutandis incases where there is any shortage in the object of a sale made for a designated quantity, or incases where part of the object was already lost at the time of the contract, if the buyer did notknow of the shortage or loss’. Taken from Japanese Law Translation Database System,
Copyright © 2018 Ministry of Justice, Japan. All Rights Reserved, available athttps://tinyurl.com/y9ry6cu6 (last visited 15 November 2018).
41 Art 563: ‘(1) If the seller cannot transfer any part of the rights which are the subject
matter of the sale because the part of the rights belongs to others, the seller may demand areduction of the purchase money in proportion to the value of the part in shortage. (2) In thecases set forth in the preceding paragraph, a buyer in good faith may cancel the contract if thebuyer would not have bought the rights if the rights consisted only of the remaining portion.(3)A demand for the reduction in the purchase money or cancellation of the contract shall notpreclude a buyer in good faith from making a claim for damages’.
42 Art 564: ‘The rights under the preceding Art must be exercised within one year from thetime when the buyer knew the facts if the buyer was in good faith, or within one year from thetime of the contract if the buyer had knowledge, as the case may be’.
43 Art 570: ‘If there is any latent defect in the subject matter of a sale, the provisions ofArticle 566 shall apply mutatis mutandis (…)’.
44 S. Wagatsuma, Saiken Kakuron Chukan I (Minpō Kōgi V2) (Tōkyō: Iwanami Shoten,1957), 288.

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The Italian Law Journal[Special Issue

the contract cannot be achieved due to the present defect (Art 566).45
This entire system has been much discussed. First, whether the Art 565
special liability is to be considered a liability concerning parties very rights or aliability on the goods has been debated. In fact, since Art 565 applies mutatis
mutandis the remedies of defects in rights, it can be considered accordingly as aliability in rights but at the same time a lack in quantity can be considered adefect of the goods.46
Furthermore, the present Minpō was drafted to provide a body of law that
could make Japan earn the trust of Western Powers and revise unequal treaties
signed with Western Powers in the middle of 19th century. For this purpose,
legal concepts were transplanted directly from European legal culture by a small
group of law experts. This resulted in a wording that sometimes seems alien to
everyday life47 and can lead to different interpretations of the scope of thewarranty. There was a discussion regarding the meaning of the word defect in
Art 570 since it can be intended objectively as a feature which that kind of
subject matter of contract usually possesses.48 However, recent tribunal decisions
and recent doctrinal opinions49 give a more subjective position according towhich the feature of the object must be considered in the context of the contract.50
There has been a long discussion, about the relationship of the Art 570
special liability on hidden defects and the general rule on breach of contract.51 A
first position formulated in the 1920s claimed that this warranty was only
applicable in the case of unique goods. According to this position, in the case ofa sale of unique goods, a seller’s duty consists only in the delivery of goods andnothing more since unique goods cannot be considered defective. However, thismakes the balance of a sale contract tremble since the buyer has the obligation
to pay even in presence of a defect. Art 570 has the function of counterbalancing
the buyer’s obligation, thereby guaranteeing a protection to him for the sale ofunique goods. In this light, Art 570 special liability was considered a noncontractual obligation imposed by law on unique goods sales. Its remedies were
only termination of contract and damages limited to reliance interest. However,this position was heavily criticized in terms of scope of application. It was
45 Art 566: ‘((1)In cases where the subject matter of the sale is encumbered with for the

purpose of a superficies, an emphyteusis, an easement, a right of retention or a pledge, if thebuyer does not know the same and cannot achieve the purpose of the contract on accountthereof, the buyer may cancel the contract. In such cases, if the contract cannot be cancelled,
the buyer may only demand compensation for damages (…) (3) In the cases set forth in thepreceding two paragraphs, the cancellation of the contract or claim for damages must be madewithin one year from the time when the buyer comes to know the facts (…)’.
46 K. Yamamoto, Minpō Kogi IV-1 (Tōkyō: Yūhikaku, 2005), 300.
47 H. Nakata, n 9 above, 4.
48 S. Wagatsuma, n 44 above, 288.
49 Supreme Court of Japan Decision, 1 June 2010 (H21(JU)n.17; H21(O)n.17); T. Uchida,n 39 above, 135.
50 K. Yamamoto, n 46 above, 280-281.
51 T.Uchida, n 39 above, 127-128.

2018]CISG and the Interpretation of the Reformed Minpō186

considered too strict and not reflecting the reality of transactions. It put all the
expectations on quality and functionality of the goods outside the framework of
the contract and excluded the possibility of reparations and, if possible,
substitution. This created a provision applicable only in a few cases. In addition,
this would have given the buyer the possibility of making claims about quality
issues for non-unique goods for ten years in accordance with the general rule in
Art 167.1.52 This was held to be unrealistic when applied to actual business
transactions.53
Therefore, in the 1960s this special liability started to be considered as acontractual-related matter. According to this, a seller has the duty to transfer
the property of the goods with quality and functionality matching the price paidby the buyer, regardless of whether they’re unique goods or not. In case theseller delivers goods with latent defects, he commits a breach of contract according
to Art 570 which acts as a special rule for that kind of breach. Seen as such, Art
570 special liability grants the buyer remedies provided by general breach ofcontract liability like complete fulfillment, substitution and reparation in addition
to remedies provided by Art 570 itself. The scope of damages will follow thegeneral rule in Art 416 so that fulfillment profits also are included.54
2. Reformed Non-Conformity Rule
The above discussion about the content of Arts 565 and 570 shows it was
felt a reform was needed. In fact, the new reform was desired for two main reasons.
One reason was more theoretical. It consisted basically of trying to solve theproblem of critical wording and the gap between the black letter law and thereal application of the provisions that happened to be created due to the influenceof doctrinal opinions and tribunal decisions.55
The second reason was that the reform was needed due to the evolution of
the international market.56 Modern commerce evolved in a way that basic
transactions came to be based on non-unique goods which must be delivered
without quality problems.57
With this background, the reform committee felt the need to reformulate
the Minpō to reflect the new realities regarding the quality and quantity ofgoods system. Specifically, the new Art 562 provides:‘When a delivered object of the contract does not conform to the content
52 Art 167: ‘A claim shall be extinguished if not exercised for ten years’. Taken from

‘Japanese Law Translation Database System’, Copyright © 2018 Ministry of Justice, Japan. All
Rights Reserved, available at https://tinyurl.com/y9ry6cu6 (last visited 15 November 2018).
53 T. Uchida, n 39 above, 127-128.
54 ibid.
55 H. Nakata, n 9 above, 312; T. Tsutsui, n 8 above, 20.
56 H. Nakata, n 9 above, 5-6; T. Tsutsui, n 8 above, 20.
57 H. Nakata, n 9 above, 312.

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The Italian Law Journal[Special Issueof the contract in terms of type, quality or quantity, the buyer may make aclaim to the seller for completion of the obligation by repairing the subject
matter, delivery of a substitute or completion of the obligation by deliveryof the remaining part (…)’.
In addition, Art 563 provides the possibility of a price reduction in casethere is no completion of the obligation. Art 564 provides the remedies forbreach of contract (damages and termination of contract). However, in case oftermination, the new rule in Arts 541 and 542 provides that a contract can beterminated only in case of a fundamental breach.58
In short, we can see four main changes regarding non-conformity of goods
provisions. First, Art 562 seems to put an end to the discussion regarding thenature of warranties on non-conformity in the present Minpō. In fact, the newprovision confirms the doctrinal position by which the non-conformity of goods
is not a liability not connected to the contract, putting it as a kind of breach ofcontract.59 Secondly, lack of quantity issues has been put into the umbrella ofnon-conformity of goods 60 and thirdly cryptical terms like defect have been
eliminated.61 In addition, the Minpō, seems to have been reformed to guarantee
the survival of the contract. This is proven by a system of remedies that follow
the principle of Favor Contractus.62
How do these new provisions relate to the CISG system of non-conformityof goods?
IV. Conclusion
The Minpō reform on conformity of goods and Art 35 of the CISG weredrafted with different theoretical purposes. The former has firstly the objectiveof reflecting the doctrinal opinions and decisions accumulated in over a hundredyears of legal history. The latter was supposed to find the golden path between
legal cultures. However, both seem to have reached the same conclusionconsidering that the new Art 562 of the Minpō seems to adopt an approach very
close to Art 35.1 of the CISG. In fact, they both put all cases of non-conformity ofgoods in the context of breach of contract using the same wording.63
58 Y. Shiomi, n 3 above, 94-102.
59 Y. Shiomi, ‘Baibai, Ukeoi no Tanpo Sekinin’ 1045 New Business Law, 7, 8 (2015); T.

Furutani, ‘Minpōkaisei to Baibai ni okeru Keiyakufutekigōkyūfu’ 51(3-4) Sandaihōgaku, 819,
819-820 (2018).
60 Y. Shiomi, n 3 above, 91; S. Wagatsuma et al, Wagatsuma, Arizumi Konmentāru Minpō(Sōsoku, Bukken, Saiken) (Tōkyō: Nihonhyōronsha, 2018), 1160.
61 Y. Shiomi, n 3 above, 90; T. Furutani, n 59 above.
62 H. Matsuo, Saikenhōkaisei o Yomu – Kaiseiron kara Manabu Shinminpō(Keiōgijukushuppankai: Tōkyō, 2017), 3-4.
63 M. Nozawa, ‘Minpō(Saikenhō)no Aratana Chihei - Baibai’ 739 Hōgaku Seminar, 36, 37(2016).

2018]CISG and the Interpretation of the Reformed Minpō

188

In addition, the Minpō reform and the CISG have in common the objectiveof adapting the rules on non-conformity of goods to the issues of internationalcommerce. Regarding non-conformity of goods provision, the reformed Minpō,
just as the CISG does, seems to follow the favor contractus principle on remedies,trying to guarantee as possible the survival of the contract.
Can we say that they have the same provision so that we can use the CISG
to interpret Art 562 of the reformed Minpō?
In trying to answer this question, one must not forget the very objective
under which the CISG was made. In particular, it was structured to regulate
only international sales of goods. This can be seen by taking a look at theprovisions related to conformity of goods. For example, the relationship between
the passing of risk and conformity of goods, a pivotal concept in the international
sale of goods since international sales usually include a transportation contract.
In this regard, the Convention relating to the Uniform Law on the International
Sale of Goods (ULIS), one of the predecessors of the CISG together with theConvention relating to a Uniform Law on the Formation of Contracts for theInternational Sale of Goods (ULF), provided a treatment of the concept of
passage of risk that was heavily criticized. Art 97.1 of ULIS disposed that ‘The
risk shall pass to the buyer when delivery of the goods is effected in accordancewith the provisions of the contract and the present law’. Art 19.1 of the ULIS
defined delivery as ‘the handing over of goods which conform with the contract’,modelled from the French law concept of délivrance.64 Therefore, under ULIS,
if a buyer refused a shipment saying that the quality of goods was not in conformity
and claiming for instance the termination of the contract or the substitution of
the goods, the risk liability on the goods still stays on the seller even if the goods
are physically delivered to the buyer. This situation can be bearable in aninternational sale involving parties living in confining states or states in a
relatively close distance. However, in a sale involving, for example, transportation
by sea or long distances to deliver goods, the burden of liability for the seller canbe an excessive one.65 As a matter of fact, the ULIS seemed to be conscious of
this problem. It tried to resolve it with Art 97.266 which established a duty forthe seller to take possession of the goods even if he had rejected them. However,the black letter law itself was considered too complicated as it left a broad room
64 J.O. Honnold, ‘Uniform Law for International Sales’ 107 University of Pennsylvania
Law Review, 299, 318 (1959).
65 M.L. Ziontz, ‘A New Uniform Law for the International Sale of Goods: Is it Compatible
with American Interests?’ 2 Northwestern Journal of International Law & Business, 129, 138141 (1980).
66 Art 97.2: ‘Where goods dispatched to the buyer have been put at his disposal at theirplace of destination and he exercises the right to reject them, he shall be bound to take possession ofthem on behalf of the seller, provided that this may be done without payment of the price andwithout unreasonable inconvenience or unreasonable expense. This provision shall not apply
where the seller or a person authorized to take charge of the goods on his behalf is present atsuch destination’.

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for interpretation.67 In response to these problems, while establishing the duty ofthe seller to deliver the goods at Art 30, Art 67.1 of CISG defines delivery as thehanding over of the goods and with that, the passage of risk of loss, but passage
of risk is intended not to depend on the goods being free from non-conformities.68
In contrast with the CISG, the reformed the Minpō seems to follow the
ULIS path and not the path of the CISG.69 Art 567.1 of the reformed Minpō
provides that the passage of risk happens when the seller delivers to the buyer
the subject matter of the contract ‘limited to specified goods’. Since Art 401
establishes that
‘In case the subject of the claim is specified only with reference to a
type and if the quality of such property cannot be identified due to thenature of the juristic act or intention of the relevant party(ies), the obligor
must deliver the property of intermediate quality’,70
the Minpō seems to intend that in case of delivery of non-conforming
goods, usually defined only by type and quality nowadays, the risk liability on
the goods stays on the seller.71
In conclusion, maybe the new Minpō, strictly regarding conformity ofgoods, has been inspired by the CISG and seems to have adopted a very similar
approach. However, if one considers the conformity system as a whole, one canstill see some points of difference between the two systems in some pivotal
concepts like the relationship between conformity of goods and the passage ofrisk. So maybe we can affirm that even if the objective of this reform was tointernationalize the Minpō, elements can still be found that makes one thinkthat this process is incomplete. After the coming into force of the reformed Minpō
perhaps one will see a new interpretation of these articles and a solution to thisproblem. However, at present we can affirm that the Minpō is still a rule madefor the internal market. Therefore, the CISG jurisprudence and doctrinal opinion
should be used with caution.

67 K. Sono and M. Yamate, Kokusaibaibaihō (Tokyo: Seirinshoin, 1993), 129.
68 P. Hachem, ‘Article 67’, in I. Schwenzer ed, Commentary on the UN Convention on theInternational Sale of Goods (CISG), 973．
69 M. Nozawa, n 63 above, 38.
70 Taken from ‘Japanese Law Translation Database System’, Copyright © 2018 Ministryof Justice, Japan. All Rights Reserved, available at https://tinyurl.com/y9ry6cu6 (last visited
15 November 2018).
71 Y. Shiomi, Shin Saikensōron I (Kyōto: Shinsanshuppansha, 2017), 211, 215; S. Wagatsuma
et al, n 60 above, 1168.