mini传媒

Published on October 3, 2022
Job titles and other details are as of the time of publication.
(The interview was conducted in Japanese and was thereafter translated into English.)

From commercial law to the domain of financial law

When asked about my area of specialization, I used to answer that it is commercial law. Although my research field is still categorized as commercial law, I now describe it as financial law, after having moved to the Business Law Department of Hitotsubashi University Graduate School of Law (HBL) this academic year, since HBL expects me to play a role in the domain of financial law, not only in terms of research and education but dissemination as well.

HBL returned to in-person lectures from online classes in the 2022 academic year. When holding discussions with students I recognize the importance of my roles in the business law field. Let me later explain about these roles and how I feel about this challenging but rewarding work.

Deciding to change exam subjects to liberal arts the year after failing my university entrance exams

My first encounter with commercial law, or law in general, was entirely accidental. Since I was good at mathematics during my high school years, I took my first university entrance exams for the science and mathematics fields. I had a vague idea of studying architecture or physics, but I did not have any particular specialization in mind. The University of Tokyo’s natural sciences divisions allowed applicants to sit for entrance exams without deciding on a major, so I thought I would make that decision after enrolling in the university.

Unfortunately, I failed the university’s entrance exams and spent an additional year preparing for the next year’s exams. In reevaluating my academic performance, I concluded that I probably did not succeed because my abilities failed to reach the university’s required level. At the same time, I wondered whether I could enjoy continuing to study, even if I managed to pass the exams after an additional year of study. Considering these factors, I decided to retake the university’s exams, but this time for the liberal arts field. I was fortunate to be accepted by the University of Tokyo Humanities and Social Sciences I division. But there was another problem.

It was not until I had enrolled in the university that I learned that students did not declare a major in the Humanities and Social Sciences I and II divisions. When I asked other students about their faculty choices, they looked confused. Then I realized my misunderstanding, learning at last that students enrolled in Humanities and Social Sciences I advance to the Faculty of Law. I had expected to fully experience various fields of study, including economics and sociology, before deciding on an area of specialization that would suit me, but that was no longer the case. Now that my path was directed toward the Faculty of Law, I had to think hard about what I wanted to do in legal studies.

A seminar on derivative suits motivated me to learn more about commercial law

I participated in a special seminar on commercial law with a focus on shareholder derivative suits in the second semester of my first year. Designed for first-year students, the seminar did not explore technical matters. What impressed me in the lessons was the financial scandal involving the huge loss of Daiwa Bank’s New York branch. It was a hot case with the first court decision handed down in September 2000, the month before the seminar started. I will not go into the details, but the bank’s directors were sued by its shareholders, and the court found them liable for 82.9 billion yen in damages.

This scandal made me both anxious and curious. Growing up in a typical Japanese salaried worker’s family, and changing my academic interests to the liberal arts field, I thought it would be great to be offered a job at a financial institution. For people working in this type of business, becoming a director is the biggest goal in life. But these Daiwa directors were ordered to pay more than 80 billion yen in compensation and had no choice but to file for bankruptcy. The news greatly worried me in terms of my own future planning.

But at the same time, I was filled with curiosity about how such a thing could happen, motivating me to learn more about commercial law, with my so-called “work excitement” generating a positive cycle. The more I studied and understood commercial law, the more I enjoyed the subject. I later stood at the crossroads of going to law school with financial support from my parents or engaging in research at graduate school while earning an income as an assistant. I chose the latter path. The idea of my parents paying my tuition bothered me, but more importantly I wanted to continue studying what I liked.

People working in the corporate legal department seeking to create businesses

After my three-year term of a research associate at the University of Tokyo, I seized the opportunity to teach at Hokkaido University and Tohoku University. Starting in the 2022 academic year, I was placed in charge of the HBL courses at Hitotsubashi University. All students are working adults of which 80 percent are company employees and 20 percent are lawyers, patent attorneys, accountants, and other legal professionals.

Most of the company employees are from the legal department and are taking courses mainly for two reasons. First, some are motivated to learn about the law systematically. Assigned to the legal department after having graduated from universities with faculties other than law, they find their work interesting but are frustrated teaching younger workers or team members through only on-the-job training. These students are eager to play an active role in human resource development supported by a more theoretical backbone.

Second, others seek to increase their presence in the legal department. Simply judging this or that as legally unacceptable does not help improve their presence. These students underscore the significance of their future legal departments by offering legal assistance to manufacturing and sales sectors that are struggling with legal challenges as well as sharing their ideas for creating new businesses.

As mentioned at the beginning, HBL classes usually hold group discussions. I often hear students saying they want to play a role in creating businesses. Not only businesspeople but legal professionals assisting startups also have similar ambitions.

Interpreting and presenting market suggestions to the government seeking Japan’s financial development

I have two significant goals in mind when teaching financial law classes to these students. One is to study a legal system for the regulated financial industry, and the other is to create businesses. I will explain the latter at the end as it connects to my own interests.

Finance is a regulated industry across the world. I do not oppose regulations by authorities, but financial services are rapidly changing with advances in information technology. For example, the idea of using smartphone apps to manage all personal assets did not emerge until recently. Financing was basically handled by banks in the past, but in recent years, new forms of financing, such as crowdfunding, are being introduced. Payments also used to be transacted only through bank transfers, but now various types of payment apps are available. The first goal of my classes is to learn about the current approaches to laws and regulations in this ever-changing financial environment.

As new services generally emerge from the market, Japan’s financial regulator, the Financial Services Agency, cannot grasp all of the trends. The agency is thus calling on the market, namely the private sector, to propose new regulations that will encourage more sound development of financial services. The idea of a legal system for creating new businesses develops in this background. However, with market ideas not subject to regulations, rules require interpretation based on legal terms. This is where the knowledge acquired through commercial and business law comes into play.

Shifting mindsets from the law leading society to society leading the law

Let me elaborate on the point mentioned above. The study of law was originally designed to resolve real-life disputes in court, and I believe research should be conducted in terms of how the law, among other disciplines, actually affects society. Rather than the law leading society, the law should be led by society. Following the law does not necessarily make society better, and there is no guarantee that a better society will emerge by respecting the purpose of the law. Ideas for designing laws to make society better are necessary.

Applying this approach to HBL can create a positive spiral, with students familiar with current businesses and researchers, or legal professionals, working together to devise a legal system for improving business cycles and creating new businesses under the system. The realization of “active legal practices” by providing lessons through both business and legal approaches is my current challenge. I believe HBL can make it happen.