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Japan aims to increase number of foreign-law attorneys

Deregulation aimed at promoting international arbitration

The need for businesses to resolve cross-border disputes has been growing, but only around 20 international arbitration cases are handled in Japan annually. (Photo by Akira Kodaka)

TOKYO -- The Japanese government is planning to revise laws to allow more foreign-licensed attorneys to practice in the country, with a view to building a stronger capability to handle international arbitration cases.

Tokyo plans to relax the requirements for legal professionals to register as attorneys and allow them to set up joint corporations with local partners. 

International arbitration aims to resolve cross-border business disputes and the move is aimed at making it easier for foreign companies to seek resolution in Japan.

Several hundred such cases are resolved annually in the U.S. and U.K. In Asia, the system is prominent in Singapore and Hong Kong. In Japan, by contrast, only about 20 cases are handled annually.

Bills to revise the related laws will be submitted to the extraordinary Diet session in the fall, with the changes set to be introduced gradually from next spring.

Details are to be decided at an upcoming meeting of relevant government offices and ministries. The plan will be incorporated into the government's basic policy on economic and fiscal management, which is being compiled for 2018.

Currently, foreign law attorneys can operate legal services for a fee in Japan if they have a specified level of professional experience overseas, received approval from the justice ministry and registered with the Japan Federation of Bar Associations.

The services they provide include advice on laws in the countries where they qualified and representing clients in international arbitration.

However, they are not allowed to act as representatives in lawsuits based on Japanese law or criminal cases, or express opinions on laws other than those of the country that issued their license. A total of 412 foreign-law attorneys were registered as of April 1.

Under the current system, individuals are required to have had three years of professional experience, including at least two years overseas, before they can register. The government's plan will likely shorten those requirements to two year and one years, respectively.

At present, foreign-law attorneys are not allowed to set up a legal practice in partnership with a Japanese-registered counterpart. This measure is designed to prevent individuals without local qualifications handling work related to Japanese law.

The government now plans to allow joint corporations, paving the way for offices that can offer legal advisory and services that transcend the boundary between Japanese and foreign laws.

Tokyo hopes the change will mean more cases of international arbitration are handled in the country. 

Unlike court decisions, which come under the jurisdiction of local courts, judgment from an arbitrator is valid throughout roughly 150 countries and territories that participate in a treaty that sets out the rules of international arbitration.

The need for the system is increasing, especially for disputes involving emerging countries, where less developed legal systems and questionable court practices can put businesses at a disadvantage.

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