Legalculture

the Rational Economic School.^[393] Ahybrid approach that seeks to accommodate all of the schools of thought also has its proponents.

The Cultural Approach, first posited by Professor Takeyoshi Kawashima in the 1960s, asserts that Japan's litigation rate is lower than the United States' because the Japanese people do not like law; that is, they have a low legal consciousness.^[394] The assertion, which has become stylised by much repeti­tion not necessarily informed by the subtlety with which Kawashima originally argued,^[395]5 suggests thatthe Japanese people are stillbound to pre-modernisation norms that tend towards social cohesion, deference to hierarchies, and slow evolutionary movement towards modern, universal norms.

Writing in the 1970s, Professor John Haley was the first to challenge the Cultural Approach, arguing rather that Japan's litigation rate was comparatively lower than the United States' due to ineffective legal institutions.^[396] In other words, it was not a lack of legal consciousness based on traditional values that saw the Japanese reluctant to assert their rights. It was that the legal institu­tions systemically stymied any attempt to assert rights. As a result, the Japanese reverted to informal resolution not by preference but due to lack of effective options. For example, the scarcity of lawyers and judges, costly litigation and ineffective remedies meant that most differences were resolved based on infor­mal settlement underpinned by relational dynamics and power considerations.

Picking up the debate in the 1980s, Professor Frank Upham (and other sig­nificant contributors such as Professor Setsuo Miyazawa)^[397] agreed with Haley that the problem was formal legal institutions that failed to perform (and noted that informal institutions performed admirably).^[398] However, they diverged by asserting that the failure was not a matter of historical accident or unconscious socialisation, but the result of mindful planning by societal elites who purpose­fully constructed the inefficient legal institutions and efficient informal mecha­nisms as a way to reinforce and maintain the importance of their roles as elites.

Subsequently, Professor Mark Ramseyer set on a new path when he asserted contrary to common belief that Japanese people had a robust legal consciousness and culture.^[399] Rather, he emphasised that the Japanese people were rational economic actors and Japan has a more transparent legal system and institutions than other countries, which allows people to better predict legal outcomes and thereby avoid the cost of engaging formal legal institutions. In support of this assertion, he noted the consistency and predictability of Japanese courts, that standard remedies were widely known and circulated by publishing companies, and that institutions such as insurers had systematised and standardised claims processes. Consequently, due to this heightened legal consciousness, Japan's liti­gation rate was lower than the United States' because Japanese people were able to avoid rationally the expense of litigation by asserting their widely understood rights through less expensive yet equally reliable and more efficient alternative dispute resolution mechanisms.

The recent trend by a host of writers is to acknowledge the correctness of all of these schools of thought. These commentators make the point that the circumstances of the dispute largely dictate which theory most closely meets experience.^[400] In other words, two unknown urban actors in a predictable encounter such as a traffic accident are more likely to resolve the dispute ratio­nally, while people arguing a unique constitutional position are more likely to be frustrated by elite bias or societal inaction, and people in minor disputes with acquaintances in rural areas may defer to social relationships. The more recent commentators also note that it is the United States that appears to be the outlier when a broader multi-country comparison is made and also that Japan's litiga­tion rates and reference to legal norms has increased markedly over the last half century.

Beyond the intellectual exercise of the academic debate, the question has raised matters immensely relevant to Japanese law reform and comparative law. If one accepts the premise of the Cultural School, law reform efforts should be centred on modernisation campaigns such as education and public relations. This is exactly how the campaign around the new quasi-jury system (saiban- in seido) has been framed.^[401] If one accepts the premise of the Failed Systems School, law reform campaigns should focus on increasing accessibility to legal institutions. Belief in this approach may be seen, among other places, in the moves to triple the number of lawyers over a 10-year period, from 1996 to 2005. Similarly, scepticism from the Elite Managerial School leads one to advocate more transparent legal standards and empowering courts as has been seen with many of the corporate law reforms in the late 1990s. Adherents of the Rational Economic School suggest that there is little need for reform and only minor refinements - particularly to the informal institutions - are needed to address current limitations. Those who cited pre-scandal Toyota as the corporate law model - that is, a successful international company that had retained the pre- 1990s Japanese corporate governance model - would exemplify this approach.

Lessons concerning comparative law also diverge depending upon where one stands on the Japanese legal culture debate. If one accepts the presumptions of the Cultural School, comparative law has little utility in Japan as culture cannot be imported or exported, so the lessons of Japan and abroad are irrelevant to solving local problems. All of the three otherschools, however, beganwithabelief in legal institutions and the transferability of the lessons from the institutions. Of course, they align on a spectrum so that the Rational Economic approach most strongly believes in transferability and universality, while the Failed Systems School is much more willing to concede the uniqueness of each legal institution, and the Elite Managerial group falls between these poles. Given these diverging assumptions in law reform and comparative law, familiarity and ability to identify the different schools is a critical skill in understanding and applying the lessons from Japanese law.

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