What are the Lawyer Fees and Compensation Process for Reputational Damage Measures?

If you have suffered reputational damage on the Internet, you can consult with a lawyer to remove the damage through measures such as page deletion, identify the perpetrator, and make a claim for damages against the perpetrator. However, when considering these measures, the cost of legal fees is inevitably a concern.

• What is the average cost of legal fees?
• Considering the claim for damages, how much budget should be prepared in relation to the damages that can be claimed from the perpetrator?

On these points, as will be discussed later, we will provide an explanation that is as close as possible to the actual situation, rather than just stating an ‘optimistic’ outlook.

Page Removal in Reputational Damage Control

Firstly, there are two main types of reputational damage control measures that can be taken when you engage a lawyer:

• Removal of the targeted pages, tweets, bulletin board posts, etc.
• Identification of the perpetrator who made the posts, etc.

Regarding the latter, removal, there are two methods:

• Removal only, carried out through out-of-court negotiations or court proceedings (explained later)
• Along with removal, the first step of perpetrator identification, which is ‘IP address disclosure (explained later)’, is carried out through court proceedings

In other words, if you are also identifying the perpetrator, you can simultaneously request removal.

Among these, in the former case, that is, when only removal is requested, especially when removal is requested through out-of-court negotiations, there are quite a few cases where you can engage on a complete success fee basis, meaning ‘lawyer fees are incurred only when successful’. However, depending on the case, there may be a large amount of work involved in preparing and researching for out-of-court removal negotiations, making it difficult to operate on a complete success fee basis.

Identifying the Perpetrator and Claiming Damages in Reputational Damage Control

Firstly, when identifying the perpetrator and claiming damages, the general flow is as follows:

1. Request the site used by the perpetrator (for example, Twitter) to delete the defamatory post and disclose the IP address
2. If the IP address is disclosed in step 1 and the provider used by the perpetrator (for example, nifty or Docomo) is identified, request the provider to preserve the logs
3. Next, request the provider to disclose the perpetrator’s name and address
4. If the perpetrator’s name and address are disclosed in step 3, claim damages from the perpetrator

In steps 1-3, attorney fees will inevitably be incurred. However, if you can reach step 4, the attorney fees used in steps 1-3 can be claimed as “investigation costs required to identify the perpetrator” from the perpetrator. Therefore, broadly speaking,

• There is a need to initially pay attorney fees in steps 1-3
• However, you can recover these from the perpetrator in step 4

This is the flow of the process.

Step 1: Removal of Defamatory Posts and Disclosure of IP Addresses

This step involves either out-of-court negotiations for some sites, or a procedure called “provisional disposition” for many others. Provisional disposition is a process that goes through the court, but it is shorter than a lawsuit.

Costs in the Case of Out-of-Court Negotiations

In the case of out-of-court negotiations, there are many cases where a complete success fee system is possible, and in such cases, the cost is often several hundred thousand yen. For example, let’s assume a success fee of 300,000 yen in this article. Since it is a “complete success fee system”, no cost will be incurred if it fails.

However, the “success” here refers to “being able to receive deletion & IP address disclosure from the other site (for example, Twitter)”. Therefore,

• If the “defamatory post remains on the internet” is resolved, it is considered a “success” at this point if it is deleted.
• Just receiving the IP address disclosure does not yet identify who the perpetrator is. In relation to “identifying the perpetrator”, it cannot yet be called a “success”.

However, once you have received the IP address disclosure, it can be said that you have achieved “success” in relation to the consultation content. If you fail to disclose the “perpetrator’s name and address” mentioned later, you will not be able to recover this success fee equivalent amount from the perpetrator, and in that sense, you will end up “in the red”.

In the Case of Provisional Disposition

In the case of provisional disposition, it is inevitably a “procedure through the court”, and there are many cases where it is impossible to have a complete success fee system. Procedures through the court require a large amount of documents and evidence in practice. A pricing system of “retainer fee + success fee” is often used.

For more details on these procedures, please refer to the article below.

https://monolith.law/reputation/provider-liability-limitation-law[ja]

What is the “Market Price” for Attorney Fees for Provisional Disposition?

According to information on the internet,

• For deletion, the retainer fee is about 200,000 yen, and the success fee is about 150,000 yen.
• For IP address disclosure, the retainer fee is about 200,000 to 300,000 yen, and the success fee is about 150,000 to 200,000 yen.
• For deletion & IP address disclosure, the retainer fee is about 300,000 yen, and the success fee is about 300,000 yen.

These are often said to be the “market prices”.

However, this is ultimately dependent on factors such as the site in question and the content and volume of the defamatory post. For example, even if it’s Twitter, the price will inevitably change depending on whether you are requesting deletion & IP address disclosure for only one tweet or for ten tweets.

Also, although it is not often mentioned on the internet, since Twitter is operated by the foreign corporation Twitter, Inc.,

• Costs for obtaining corporate registration of a foreign corporation
• Costs for translating documents into English

are necessary. Depending on the translation agency and the volume of documents (which varies depending on the number of tweets, etc.), these actual expenses require about 200,000 yen.

If you sought deletion & IP address disclosure through provisional disposition and lost
→ You will bear a burden of 500,000 yen in retainer fees and actual expenses.

The “Market Price” Information on the Internet is Not Necessarily Correct

Including the above, the “market prices” shown as information on the internet do not necessarily agree with the views of attorneys who actually handle such work. For example, as mentioned above, the “market prices” on the internet are,

• In the case of “deletion (only)”: about 350,000 yen in total as mentioned above
• In the case of “deletion & IP address disclosure”: about 600,000 yen in total as mentioned above

There is a certain difference in the amount. However, the difficulty and workload of provisional disposition are honestly not much different in either case. Please understand that the “market prices” shown in this article are only “according to information on the internet”.

Step 2: Request for Log Preservation

This step is a bit complex when it comes to understanding why it is necessary in the first place.

Firstly, once the perpetrator’s IP address is disclosed through Step 1, the provider that the perpetrator was using (for example, nifty or Docomo) becomes known. As will be mentioned later, the provider has the perpetrator’s name and address as contract information. Therefore, it would be sufficient to request the provider to disclose the name and address. However, there is one major problem. The provider does not keep logs indefinitely. This article will omit the details, but roughly speaking, in the case of mobile lines, the provider (mobile carrier) deletes the logs in about three months, and in the case of fixed lines, the provider deletes the logs in about six months to a year. And as will be mentioned later in Step 3, most requests for disclosure of names and addresses to providers involve legal proceedings, which take at least three months, and often more than half a year. In other words, “the provider’s logs are deleted while the lawsuit is in progress”.

Therefore, before filing a lawsuit, it is necessary to request the provider to “preserve the logs without deleting them because a lawsuit will be filed from now on”. Most providers operate on the basis that if this request is made, they will keep the logs until the lawsuit is over.

The attorney’s fees for this part of the procedure are said to be included in the cost of the lawsuit in Step 3 mentioned later, or if only this is done, the administrative fee is about 100,000 yen.

However, since the summer of 2020, some mobile carriers have started to refuse the above-mentioned preservation request. In this case, it becomes necessary to request the court procedure (provisional disposition) to “save the log (do not delete it)”. This is called a “provisional disposition prohibiting log deletion”. In this case, because it becomes a provisional disposition procedure, the attorney’s fees will inevitably be about the same as in Step 1.

Step 3: Disclosure of the Offender’s Name and Address

This step is rarely successful in out-of-court negotiations. The aim is to request the disclosure of the offender’s name and address from the provider they used (for example, nifty or Docomo). However, from the perspective of nifty or Docomo, the “offender’s name and address” is nothing more than the customer’s personal information. In many cases, the response is, “We will disclose it if we lose in court, but it is difficult to disclose it without losing in court.”

Cost of Disclosing Name and Address

Therefore, you will need to sue the provider that the offender used (for example, nifty or Docomo) to request disclosure. Regarding this part, it is often seen on the internet that:

• The cost for disclosing the name and address is about 300,000 yen for the initial fee and about 200,000 yen for the success fee.

However, this also depends on the company you are dealing with, the content and volume of the defamatory post, etc. For now, let’s assume an initial fee of 300,000 yen and a success fee of 200,000 yen.

If you succeed in requesting deletion & IP address disclosure in out-of-court negotiations, but lose in the lawsuit for name and address disclosure
→ You succeeded in deletion, but the offender remains unknown. As a lawyer’s fee for Step 1, you bear the success fee of 300,000 yen. As a lawyer’s fee for Step 2, you bear the initial fee of 300,000 yen. Total burden of 600,000 yen.

If you win in requesting deletion & IP address disclosure in a provisional disposition, but lose in the lawsuit for name and address disclosure
→ You succeeded in deletion, but the offender remains unknown. As a lawyer’s fee for Step 1, you bear the initial fee, actual expenses, and success fee, totaling 800,000 yen. As a lawyer’s fee for Step 2, you bear the initial fee of 300,000 yen. Total burden of 1,100,000 yen.

For more details on these steps to identify the offender, please refer to the article below.

https://monolith.law/reputation/disclosure-of-the-senders-information[ja]

Detailed Procedures and Costs for Each Site

This article does not specifically discuss the “procedures and costs for this site,” but rather explains the general procedures and costs related to online defamation. However, there may be cases where:

• The procedure for this site is slightly different from the general case
• As a result, the lawyer’s fees, etc., are different

We also have articles on our site that explain the flow and costs of identifying posters for each site, separate from this article.

Step 4: Claiming Damages for Reputational Harm

In this step, you will be claiming the total amount of:

• Legal fees incurred in Steps 1-3 (as “investigation costs”)
• Compensation for emotional distress (damages for psychological harm)

Although it’s difficult to establish a “standard” amount for emotional distress, it can range from several hundred thousand yen to a few million yen. The amount of compensation varies depending on various factors such as:

• The personalityistics of the victim
• The severity of the content posted, such as tweets
• The volume of the posted content
• The extent of the actual damage incurred

Therefore, it’s difficult to clearly establish a “standard” amount. The following article explores the “standard” amount based on past court cases.

https://monolith.law/reputation/compensation-for-defamation-damages[ja]

As for legal fees, there are two possible structures: a retainer plus a success fee, or a full success fee.

Under the old Japanese lawyer fee standard, if the claim amount is 3 million yen or less, the retainer is 8% of the claim amount, and the success fee is 16% of the amount awarded in the judgment. For example, if you claim a total of 2 million yen and 1.5 million yen is accepted, the retainer is 2 million yen x 8% = 160,000 yen, and the success fee is 150 x 16% = 240,000 yen, totaling 400,000 yen. The following article provides a detailed explanation of this calculation.

https://monolith.law/corporate/basis-for-calculating-lawyer-fees[ja]

In the case of a full success fee, it is often around 30%.

If you successfully negotiate for deletion and IP address disclosure out of court, win the lawsuit for name and address disclosure, claim 900,000 yen in legal fees + 1 million yen in emotional distress, and 500,000 yen in emotional distress is accepted
→ You bear 300,000 yen as a success fee for the legal fees in Step 1, and a total of 600,000 yen for the legal fees in Step 2. For the damage claim, you bear a retainer of just over 150,000 yen and a success fee of just over 220,000 yen. The total burden is 1.27 million yen. However, if you receive a payment of 1.4 million yen from the offender, you will have a total of 130,000 yen left over.

If you win a provisional disposition for deletion and IP address disclosure, win the lawsuit for name and address disclosure, claim 1.4 million yen in legal fees + 1 million yen in emotional distress, and 500,000 yen in emotional distress is accepted
→ You bear a total of 800,000 yen for the legal fees in Step 1, and a total of 600,000 yen for the legal fees in Step 2. For the damage claim, you bear a retainer of just over 190,000 yen and a success fee of just over 300,000 yen. The total burden is 1.89 million yen. However, if you receive a payment of 1.9 million yen from the offender, you will have a total of 10,000 yen left over.

Summary

Claiming damages for reputational harm is not always profitable

As such, identifying the perpetrator of defamation can be seen as:

• Reaching the identification of the perpetrator
• Being able to receive payment for a claim for damages from the perpetrator
• There is a high possibility that some money will remain in hand

However, it is not easy to say, “You should actively pursue this because legal fees are cheap and you can receive compensation for emotional distress from the perpetrator.”

Furthermore, information sites on the Internet, especially those not operated by law firms, often receive advertising fees from lawyers and disseminate information with the attitude that “identifying the perpetrator through a lawyer is affordable and should be actively consulted.” Therefore, our sincere wish as a law firm that handles many such lawsuits is that you do not take information on the Internet at face value and carefully consider it.

The compensation for reputational harm is too low

The main reason for this structure is that the compensation that can be claimed from the perpetrator is too low.

Reputational harm on the Internet often results in resignation due to cases where the perpetrator cannot be traced or technical limitations, even if consulted. We explain this issue in detail in the following article.

https://monolith.law/reputation/disclosure-of-ipaddress[ja]

Above all, reputational harm on the Internet can have a significant negative impact on major life decisions such as marriage and employment for individuals, and on major issues that determine the fate of a company, such as sales, recruitment, and listing examinations.

Considering the size of these “risks” and damages, the compensation, as mentioned above, is “from several hundred thousand yen to a maximum of several million yen,” which is the current operation of Japanese courts, but isn’t it too low?

It is possible to make efforts as a lawyer to remove reputational harm

However, at least if you succeed in identifying the perpetrator and claiming damages, as mentioned above, the victim will not bear the cost, in principle. Also, at least if deletion is successful in one stage, you can avoid the situation where reputational harm continues on the Internet. If you decide not to “resign,” you can say that it is possible to make efforts as a lawyer to reach not only deletion but also the final claim for damages by entrusting it to a lawyer who has know-how and knowledge in these tasks.

Lastly, to add, in the process of deletion and identification of the perpetrator, there are cases where the perpetrator, who has noticed that identification is imminent, offers a settlement (settlement). We explain this story in detail in the following article.