Written by: Joel Rheuben (Herbert Smith Freehills, Brussels) and Luke Nottage

It has been almost four years since the devastating triple disaster comprising a magnitude-9 earthquake, tsunami and meltdown of the Fukushima Dai-ichi Nuclear Power Plant struck northeastern Japan on 11 March 2011. While a variety of programmes exist to assist residents of the affected areas, it is only victims of the third of these disasters – tens of thousands of evacuees (even nowhttp://www.japantimes.co.jp/news/2014/03/13/national/thousands-sue-nuclear-companies-over-fukushima-disaster/#.VMXASMZdHTA) as well as many affected local businesses – who have access to a comprehensive scheme of compensation, administered by the plant’s operator, Tokyo Electric Power Company (“TEPCO”). Claimants for compensation have three options for the resolution of claims: direct negotiation with TEPCO, mediation via the specially established “Dispute Resolution Centre for Nuclear Damage Compensation” (the “Dispute Resolution Centre”), and civil action under the Nuclear Damages Compensation Law (No 147 of 1961). Each avenue is outlined in turn below, based on an unfootnoted but updated version of our article published in October 2013 at pp126-31 of the Asian Dispute Review (supported by HKIAC and several other arbitral bodies) under the main title of “Now that the (radioactive) dust has settled”.

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[The following is a longer and un-footnoted draft of a third Policy Digest prepared for a Sydney Southeast Asia Centre joint research project and an ASEAN Secretariat project on consumer protection law.

A. Under-Enforcement of Product Liability Law for Small-Value Claims

Manufacturers can be incentivised to supply safe consumer goods due to market (reputation) mechanisms, public safety regulation, and/or private law (especially potential tort law liability if consumers claim compensation for harm caused by defective products). The first two mechanisms work better if there is a high probability or risk of harm, as public opinion is then easier to mobilize, although public safety regulation is usually only implemented when the potential harm from unsafe goods is also high. Product liability (PL) law is therefore particularly important to incentivise manufacturers of goods that present a lower probability of harm. However, because of costs associated with enforcing PL law – ultimately through the court system – it tends to work best where the harm and therefore compensation amounts are high. Strict liability PL regimes, increasingly common in ASEAN member states, aim to lessen the burden of proof on potential plaintiffs, who no longer have to prove negligence on the part of manufacturers. Accordingly, they can make more feasible this mechanism even for defective products that generate lower levels of harm and compensation amounts.

Nonetheless, strict liability PL law is still often difficult for consumers to invoke, even in developed countries with comparatively good access to court procedures. After all, unsafe products may often just cause consequential loss to other “consumer goods”. (Only a few countries extend strict PL law coverage to consequential losses to non-consumer goods, which tend to be more extensive. ) Even when personal injury results from the defective products, the harm suffered by each consumer may be low even if the aggregated harm is high. (Good recent examples may be Kanebo’s skin-whitening cosmetics, recently recalled throughout Asian markets, or defective foodstuffs – if consumed in small quantities. ) In such situations, each individual consumer will be reluctant to pursue claims through the court system.

Such problems are compounded in developing and even middle-income countries, where courts are under-resourced or face other generic problems, or accessing them still runs counter to prevailing social norms. This helps explain the limited impact of strict liability PL law reforms observed in South East Asia, despite some of those countries going beyond the European Union (EU) substantive law, for example by allowing consumers to claim multiple damages (i.e. more than the actual harm suffered).

The consequent under-enforcement of consumer law in this field is problematic from the viewpoint of economic efficiency as well as broader justice concerns. After all, the basic economic rationale for introducing strict liability for unsafe manufactured products is that consumers lack expertise to assess safety levels. The latter furthermore correlate only weakly with the pricing of such goods (except some that could cause catastrophic losses if risks eventuate, such as automobiles, which tend to subject to minimum public regulatory standards anyway). Even if particularly well-informed consumers are able to differentiate safety levels of various products, they may end up in the hands of third parties. The economic benefits of introducing strict liability PL law to mitigate such problems, by forcing manufacturers to “internalize” the full costs associated with putting goods into the market, is undermined if those substantive laws are inadequately enforced. This is also problematic from the perspective of justice and advancing the rule of law, a major objective particularly in developing countries and for ASEAN.

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[The following is an un-footnoted draft of a second Policy Digest (also omitting Figures) prepared for a Sydney Southeast Asia Centre joint research project and an ASEAN Secretariat conference on consumer protection law in Hanoi over 8-9 December 2014. The footnoted final version is available at: http://www.asean.org/resources/publications/item/consumer-protection-digests-and-case-studies-a-policy-guide-volume-1?category_id=382]

1. Overview

Consumer product safety failures continue to occur ASEAN states. However, many reported cases involve product sectors that already involve some public regulation (Part 2). For other product types, many states have enacted strict product liability (PL) statutes, aimed at making it easier for harmed consumers to claim compensation and thus providing an additional incentive for manufacturers to supply safe goods (Part 3). Yet PL litigation and claims remain very limited, as in Europe (Parts 4-5). The incentive effect needs to be bolstered by other measures, including improvements in access to justice (Part 6).

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[The following is an un-footnoted longer draft of one of two Policy Digests prepared for a Sydney Southeast Asia Centre joint research project and an ASEAN Secretariat conference on consumer protection law in Hanoi over 8-9 December 2014. The footnoted final version is available at: http://www.asean.org/resources/publications/item/consumer-protection-digests-and-case-studies-a-policy-guide-volume-1?category_id=382]

1. Overview
Consumer product safety is a major contemporary concern for developing, middle-income and developed economies. ASEAN, through its Committee on Consumer Protection (ACCP), has recognised this as a priority topic for international collaboration, as trade in goods accelerates through the region with its major trading partners world-wide. Part 2 of this Digest highlights the policy challenge. Part 3 shows how market and even private law incentives are unlikely to provide sufficient incentives for manufacturers to produce safe products; some minimum regulatory standards are needed. Part 4 focuses on regulatory powers to force recalls of unsafe goods, but also requirements for suppliers to notify national regulators about ‘voluntary’ recalls. It also outlines recall information disclosure efforts underway nationally, regionally (notably within the European Union, EU, but also through ACCP since early 2011), and now internationally (especially through the Organization for Economic Cooperation and Development, OECD, since late 2012). This Digest suggests there is scope already for greater engagement by ACCP and individual ASEAN member states particularly with the OECD initiative in this field. Part 5 also urges broader information-sharing as the OECD clearing-house expands over the next few years, as well as with product safety incident reporting systems already developed particularly in the EU and the United States (US).

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The first edition of this excellent textbook, reviewed here and written by Simon Greenberg, Christopher Kee and J Romesh Weeramantry, is forthcoming next year in a second edition that will include extra detailed comparisons from Asia-Pacific jurisdictions based on reports prepared by local experts. The second edition will be an even more valuable resource for practitioners and researchers in international commercial and treaty arbitration, given that so many countries in the region have adopted (and sometimes adapted) core international instruments like the New York Convention and UNCITRAL Model Law, including both Australia and Japan,

My former student Jim Morrison, now Senior Associate at Allens Linklaters in Sydney, has prepared with me a detailed (100+ page) report on Australia as the basis for our contribution to the second edition: available via http://ssrn.com/abstract=2514124. The report focuses on the most topical issues from a comparative perspective (as identified by those three commentators), raised in each of the 10 chapters of the Greenberg et al volume. However, the paper also provides an overview of the key provisions found in Australia’s (Model Law based) International Arbitration Act and main arbitration rules, with a particular emphasis on case law developments (including brief case notes) since statutory amendments in 2010. In addition, the paper includes a guide to other major publications related to international arbitration in Australia, especially since 2010. As mentioned in that paper, a more complete listing is provided below on this Blog (thanks to another former student, Ganesh Vaheisvaran). This should be a useful resource not only for those interested in Australia but also other Model Law based jurisdictions in the region, including Japan.

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My public lecture on this topic, bringing together two research fields of contemporary public interest, was presented on 24 September 2014 as part of Sydney Law School's Distinguished Speakers Program.

The session was kindly introduced by my colleague Prof Chester Brown, and ended with a commentary by NUS Asst Prof Jean Ho who kindly arrived straight from Sydney airport after her flight from Singapore.

The audio file of my presentation and Chester's introduction are available via Sydney Law School's podcast channel (specifically here), my Powerpoint slides are here (as a PDF), and a related short paper is here. Below is the abstract (with further hyperlinked references available here) and speaker/commentator bios.

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Below is the manuscript version of our Preface to Leon Wolff, Luke Nottage and Kent Anderson (eds) Who Rules Japan? Popular Participation in the Japanese Legal Process (forthcoming in early 2015 from Edward Elgar), comprising:

1. Introduction: Who Rules Japan?
Leon Wolff, Luke Nottage and Kent Anderson

2. Judging Japan’s New Criminal Trials: Early Returns from 2009
David T. Johnson and Satoru Shinomiya

3. Popular Participation in Labour Law: The New Labour Dispute Resolution Tribunal
Takashi Araki and Leon Wolff

4. In Defence of Japan: Government Lawyers and Judicial System Reforms
Stephen Green & Luke Nottage

5. Administering Welfare in an Ageing Society
Trevor Ryan

6. Reforming Japanese Corrections: Catalysts and Conundrums
Carol Lawson

7. Competition Law in Japan: The Rise of Private Enforcement by Litigious Reformers
Souichirou Kozuka

8. When Japanese Law Goes Pop
Leon Wolff

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Japanese Law in Asia-Pacific Socio-Economic Context
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