Why Claims Handling in Japan Is Different: Legal Boundaries Between Adjusters and Settlement Negotiation
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I. Introduction: Why Japan’s Claims Process Surprises Overseas Professionals[1]
Overseas insurers, manufacturers, and loss adjusters often approach claims in Japan with the reasonable expectation that the process will broadly resemble that of other major markets. Yet, in practice, claims handling in Japan frequently surprises even experienced professionals. One source of this surprise lies in the role of loss adjusters. In many jurisdictions, adjusters are routinely authorized to negotiate and conclude settlements on behalf of insurers under delegated authority, with legal counsel becoming involved only once a dispute escalates or litigation is anticipated. In Japan, however, this model does not translate seamlessly.
This article explains why Japanese law draws a clear boundary around settlement negotiation and how this boundary affects the role of loss adjusters. It then outlines what adjusters can effectively do within the Japanese framework and provides practical guidance for overseas insurers, manufacturers, and adjusters handling claims in Japan.
[1] This communication is provided as a service to our clients and friends and is for informational purposes only. It is not intended to create an attorney-client relationship or constitute an advertisement, a solicitation, or professional advice as to any particular situation.
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