After a Refused Settlement | Recovering the Loss in Property Offences, from a Victim Counsel Perspective

Theft, fraud, embezzlement, damage to property. In a property offence, the first words are almost always the same. Will this leave a criminal record? Will my employer or my school find out? Will I still be allowed to live in Japan? All three answers turn largely on whether a settlement with the victim (jidan) can be reached. And sometimes a harder question follows. The victim has already refused. Is there nothing left to do? This article answers it.

Key points of this article

• A settlement and compensation count as circumstances arising after the offence under Article 248 of the Code of Criminal Procedure, and bear directly on the decision whether to prosecute.
• For offences prosecutable only on complaint, such as damage to property, a withdrawn complaint means prosecution can no longer be brought (Article 237 of the Code).
• In property offences, compensation can be the dividing line on whether a sentence is suspended, though where the offence is grave its effect is limited.
• For foreign nationals, a non-prosecution disposition can decide the fate of the residence status. Article 24, item 4 (ri), and item 4-2 of the Immigration Control Act both require that the person has been sentenced to a punishment.
• A refusal is not the end of the negotiation. Once the reason is broken down, there is often room to rebuild the terms.

1. Why settlements weigh so heavily in property offences

Because these are the cases in which what was lost can be restored in money. That the loss has been made good feeds directly into the decision on disposition.

Article 248 of the Code of Criminal Procedure allows prosecution to be withheld where, in view of the character, age and situation of the offender, the gravity and circumstances of the offence, and the circumstances arising after it, prosecution is found unnecessary. A settlement and compensation lie at the heart of those later circumstances.

Applying the definition in the 2025 (Reiwa 7) White Paper on Crime to its data for 2024, suspension of prosecution accounts for 49.4 percent of theft cases, 32.7 percent of fraud cases and 75.0 percent of embezzlement cases. The lower figure for fraud likely reflects the weight of organised and repeated conduct in that category. Read the other way, in an isolated property offence there is real room for restoration of the loss to move the disposition.

2. What changes once a settlement is reached

It operates at three stages: before charge, in offences prosecutable only on complaint, and at trial.

Before charge, it is the strongest material available in seeking a non-prosecution disposition by suspension of prosecution. No criminal record follows, and there is no appearance in open court.

Where an offence is prosecutable only on complaint, the effect is more direct. No prosecution may be brought without a complaint for damage to property and related offences (Articles 261 and 264 of the Penal Code), defamation and insult (Article 232, paragraph 1) or theft, fraud and embezzlement between relatives (Article 244, paragraph 2, and related provisions). Article 237, paragraph 1, of the Code allows withdrawal up to the institution of prosecution; paragraph 2 bars the person who withdrew from filing again. Withdrawal under a settlement therefore closes the route to prosecution.

At trial, a settlement operates as a sentencing factor. Practice of Criminal Trials, published by the Criminal Trial Instructors Office of the Legal Training and Research Institute, treats compensation and the victim feelings as general circumstances, secondary factors adjusting the sentence, though in some cases they carry the greatest weight.

The case law bears this out. The Osaka High Court judgment of 30 July 2015 held, in a fraud case, that full compensation was an important circumstance capable of serving as the watershed in deciding whether to suspend execution of the sentence, and quashed the judgment below, which had imposed immediate custody. The Hiroshima High Court judgment of 30 November 2023 upheld immediate custody, treating full compensation as a general circumstance to which only limited weight could be given. A settlement is not a cure for everything: where the offence is grave, it must be combined with argument directed at that gravity. (Both cases predate 1 June 2025, and the term used in the judgments reflects the law as it then stood. Under the law now in force the corresponding punishment is imprisonment (kokinkei).)

3. Why a settlement matters even more for foreign nationals

Because there are situations in which a suspended sentence is not enough, and only a non-prosecution disposition preserves the right to remain in Japan.

Article 24, item 4 (ri), of the Immigration Control Act makes a person sentenced to imprisonment for life or exceeding one year liable to deportation, with a proviso excluding a fully suspended sentence. Item 4-2 makes a holder of a residence status under Appended Table I (Engineer / Specialist in Humanities / International Services, Student, Dependent and the like) liable to deportation if sentenced to imprisonment for offences such as breaking into a residence, injury, theft, fraud, extortion or embezzlement, with no exclusion for a suspended sentence.

Both provisions require that the person has been sentenced to a punishment. Where the case ends in a non-prosecution disposition, these grounds are not made out on the wording of the statute. The guidelines of the Immigration Services Agency on changes of residence status and extensions of the period of stay add that conduct attracting a criminal disposition comparable to the grounds for deportation may be assessed as unsatisfactory even on a first offence. With extension and change of status in view, aiming at a non-prosecution disposition matters all the more.

4. Beginning when the victim contact details are unknown

It begins by asking the investigating authorities to put the question to the victim and confirm their wishes.

The suspect ordinarily has no means of learning those details directly. In practice, defence counsel asks the prosecutor or police officer in charge to pass on a request to open negotiations, and the details are disclosed only if the victim agrees. This is practice rather than a statutory procedure, and if the request is declined it stops there. That is why the first approach is decisive: unless it is clear who is approaching, about what, and how the apology and compensation are offered, the victim has no reason to respond.

5. Is a refused settlement truly over

A refusal alone does not end the negotiation. What matters is identifying why it was refused.

Refusals generally fall into a handful of categories. The sum is out of proportion to how the victim feels. The apology is formulaic, conveying nothing about what is regretted or why. Anxiety about contact from the suspect has not been dispelled. Too little time has passed for the victim to be in any frame of mind to respond. Or the victim really wants something other than money, no further contact, that an employer or family not learn of the matter, that a post or an image be deleted and stay deleted, and none of that appears in the terms offered.

Once the reason is identified, room to rebuild appears. If the difficulty is the sum, the questions are where the funds come from and how payment is secured. If it is how the apology reads, the answer is one that identifies the facts specifically. If it is fear of contact, the answer is an undertaking that all communication runs through counsel, with a no-contact clause. If the request is non-monetary, it should be written in as a term. Getting the terms right often brings a settlement closer than raising the figure, and a settlement remains possible after charge and even after judgment. Where a first approach has been refused, our practice is to break down the reasons, rebuild the terms and the way they are conveyed, and approach the victim again.

6. What victim-side experience brings to the negotiation

It brings knowledge, from the inside, of what victims are actually asking for.

Our office has handled many matters acting for victims. In a case of covert filming, we handled the criminal complaint and the negotiations and concluded a settlement providing for payment of 3 million yen in damages. In a case of prolonged stalking, acting for the victim, we obtained a settlement sum of 10 million yen. In a case of fraudulent trading in which goods were obtained without payment, we identified the counterparty through a criminal complaint and obtained a settlement sum of 75 million yen, well above the loss suffered.

What becomes clear from the victim side is that the sum is not the whole of what is sought. That there be no further contact. That the facts go no further. An assurance that it will not happen again. These are hard to see from the suspect side, and whether they are built into the draft can decide whether the victim responds. Past outcomes rest on the individual circumstances of each case and are not a guarantee of a similar result.

7. The settlement document and criminal reconciliation

Besides the sum, method and deadline for payment, consider a clause recording the victim forbearance towards the offender (yūjo), a full and final settlement clause, no-contact and confidentiality clauses, withdrawal of the complaint where the offence is prosecutable only on complaint, and, for instalments, loss of the benefit of time. Forbearance appears in neither Code and is a term of practice, yet materials of the subcommittee of the Legislative Council of the Ministry of Justice likewise list, among factors favouring suspension of prosecution, that the loss was made good and a settlement reached, and that the victim expressed forbearance.

For instalments, greater certainty is available through criminal reconciliation. Under Article 19 of the Act on Measures Incidental to Criminal Proceedings for the Protection of the Rights and Interests of Crime Victims, the defendant and the victim apply jointly to have their agreement entered in the trial record; that entry has the same effect as a judicial settlement and is a title of obligation equivalent to a final and binding judgment. Use remains limited: 19 cases in 2024, and 801 in total since it was introduced. In practice a settlement document concluded outside court is the ordinary route.

The order for damages within criminal proceedings (Article 24, paragraph 1, of the same Act) is confined to offences causing death or injury intentionally, sexual offences and the like, so property offences fall outside it. For a victim of a property offence, a settlement is therefore one of the few means of early recovery, and both sides have a practical interest in negotiating.

8. About our office

At Funado International Law Office (Toshima-ku, Tokyo), Daisuke Matsumura, attorney at law (Dai-Ichi Tokyo Bar Association, registration number 59077, admitted in 2019), focuses on criminal defence for foreign nationals, principally clients of Chinese nationality, and on administrative litigation in immigration matters. He has obtained non-prosecution where the client was alleged to be the withdrawer of funds in an organised fraud, and non-prosecution on all counts where the client was re-arrested several times as an alleged collector. We maintain a dedicated Chinese interpretation capability for detention visits, questioning and conferences; for other languages, we arrange interpreters as the case requires. Where the residence status must be extended or changed after the criminal proceedings conclude, we work with an affiliated immigration lawyer (gyōsei shoshi).

9. Frequently asked questions

Q1. Is there a going rate for a settlement sum?

There is no uniform rate. It varies with the amount of the loss, the nature of the harm, how the victim feels and how the matter came about. In property offences, restoring the loss is the starting point, but not necessarily sufficient on its own.

Q2. The victim has refused a settlement. Does that put a non-prosecution disposition out of reach?

Not necessarily. Depending on the reason, there may be room to rebuild the terms and approach the victim again. A willingness to make good the loss can also be shown by a statutory deposit or a charitable atonement payment, which may likewise form part of the material on which the prosecutor decides.

Q3. Can a settlement still be reached after charges have been brought?

Yes. A settlement at the trial stage counts as a sentencing factor, and there are reported decisions taking into account compensation made at the appellate stage.

Q4. If a settlement is reached, does that mean deportation will be avoided?

A settlement does not of itself halt deportation. If it leads to a non-prosecution disposition, the requirement in Article 24, item 4 (ri), and item 4-2 of the Act that the person has been sentenced to a punishment is not met. Other grounds for deportation may still apply, and the outcome depends on the case.

10. Closing remarks

Settlement negotiation is not the work of naming a figure. It is the work of understanding what the victim asks for, giving it the form of written terms and conveying it in a way the victim can accept. Even where a first approach has been refused, there is often room to go through that process again.

This article is a general explanation. For an individual matter, please consult a lawyer directly. Past outcomes rest on the individual circumstances of each case and are not a guarantee of a similar result.

This article reflects information as at September 2026.

About the author

Daisuke Matsumura, attorney at law (Dai-Ichi Tokyo Bar Association, registration number 59077, admitted in 2019)
Funado International Law Office (Toshima-ku, Tokyo)
Principal areas of focus: criminal defence for foreign nationals, principally clients of Chinese nationality, and administrative litigation in immigration matters
We handle criminal proceedings and questions of residence status as a single, connected matter.

Funado International Law Office
Website: https://matsumura-lawoffice.jp/
WeChat ID: matsumura1119

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