Litigation and dispute resolution in Brazil

How common is commercial litigation as a method for resolving complex, high-value disputes in Brazil?

Litigation remains the primary method for resolving commercial disputes in Brazil. This preference can be attributed to cost-effectiveness, a well-established appellate system and the establishment of specialized courts dealing with corporate law issues in regions where demand is high, such as São Paulo/SP, Curitiba/PR and Rio de Janeiro/RJ, which quick solutions required.

What is the legal framework for commercial disputes? Is your jurisdiction subject to the Civil Code or Common Law? What consequences does this have?

Brazil operates under a civil legal system, enshrined in the 1988 Federal Constitution, which enshrines essential principles including free competition and free enterprise. This legal structure is further supported by several important laws: the Economic Freedom Act (Act 13874/2019), the Corporations Act of 1976, the Civil Code of 2002 and the Civil Code of 2015. Moreover, case law has become increasingly important thanks to the institution of a system of binding precedents by the Supreme Court, which guarantees consistency and predictability in the interpretation of the Federal Constitution.

What key issues should a party consider before filing a claim?

Before initiating legal proceedings, parties should consider whether it is possible to reach an agreement with the opposing party, taking into account the long duration required to obtain a final judicial decision. This is due to the protracted nature of the Brazilian appeals system, which, despite being well established, is slow due to the large number of pending lawsuits. In addition, parties must take into account the associated costs, such as the monetary correction of the debt and the accrual of default interest. It is worth noting that the party may request in advance to present evidence in order to analyze the ease of an agreement or assess the likelihood of success of a lawsuit. It can also request interim measures (precautionary or anticipatory on the merits), which can be used to gain an advantage in reaching an agreement.

What is the judicial attitude towards mediation in Brazil?

In the current Brazilian legal system, the judiciary has a positive attitude towards mediation. This is reflected in the legal framework that encourages the use of alternative dispute resolution methods to reduce the burden on the courts and speed up the resolution process.

For example, Brazil’s 2015 Code of Civil Procedure underlines the importance of mediation and conciliation as key tools in resolving disputes.

Courts often promote these methods early in the litigation process, recognizing their effectiveness in promoting out-of-court settlements and reducing judicial backlog. This judicial approval is aligned with broader national policies aimed at improving judicial efficiency and access to justice.

How does the mediation process work in Brazil?

In Brazil, the mediation process is structured to provide an efficient and effective alternative to traditional litigation. The process usually goes as follows:

  1. Initiation: Mediation can be initiated voluntarily by the parties or suggested by a judge during ongoing litigation. The parties agree to mediate and select a mediator either from a list provided by the court or from an independent professional who meets the qualifications of the Brazilian National Council of Justice.
  2. First meeting: The mediator organizes an initial meeting with all parties involved to explain the rules and principles of mediation, such as confidentiality, neutrality and voluntariness. This meeting forms the basis for open communication and collaboration.
  3. Exploration: During subsequent sessions, the mediator facilitates discussions so that each party can express its interests, concerns, and positions. The mediator helps clarify the issues and encourages the parties to explore possible solutions. This phase is crucial for understanding the underlying needs and objectives of each party.
  4. Negotiation: As parties better understand each other’s positions, they move toward negotiating a settlement. The mediator helps brainstorm and evaluate possible outcomes, and guides the parties toward a mutually acceptable solution.
  5. Agreement: If the parties reach an agreement, the mediator helps draft the settlement terms, which are then reviewed and signed by the parties. If necessary, this Agreement may be enforced by court order.
  6. Closure: If mediation is completed without an agreement, the parties may file a lawsuit or explore other forms of alternative dispute resolution (e.g., arbitration).

How are mediators chosen and what is the mediator’s role?

In the Brazilian legal system, according to Federal Law 13.140/2015, mediators are generally chosen by agreement between the parties involved, or appointed by the court if mutual agreement cannot be reached. The selection process is facilitated by the presence of registered mediators who meet specific qualifications set out by the National Judicial Council, which ensures that they have undergone appropriate training and adhere to a set of professional standards.

The role of the mediator in Brazil is to act as a neutral facilitator in the dispute resolution process. Their primary function is to help the parties understand the issues, explore possible solutions, and negotiate a mutually acceptable agreement.

The mediator’s goal is to guide the communication process in a manner that promotes understanding, meets interests and needs, and moves the parties toward a voluntary and informed resolution of their conflict.

About Priscila Kei Sato

I am Priscila Kei Sato, a Brazilian lawyer, admitted to the bar in 1998. My professional focus is on handling important and complex legal cases. Since 2006, I have had the honor of being a partner at Arruda Alvim, Aragão, Lins & Sato Advogados. In this capacity, I have been committed to expanding my expertise and contributing to the success of our firm. My commitment is to provide strategic insight into every legal challenge so that our clients receive the highest level of legal representation.

About Arruda Alvim, Aragão, Lins & Sato

Our firm, Arruda Alvim, Aragão, Lins & Sato, provides legal advice and litigation to Brazilian and foreign companies, through administrative and judicial measures in various areas of law, through its qualified and experienced team of lawyers. It stands out for its high technical performance, personalized customer service with direct involvement of the partners, the handling of very complex legal cases with high social and economic impact, namely in class actions, direct actions for unconstitutionality, and procedures for the standardization of case law. .

Priscila Kei Sato
Arruda Alvim, Aragao,
Lins & Sato Advogados
Tel: +55 (41) 3301-3800
Fax: +55 (41) 3301-3801
Email: [email protected]
www.aalvim.com.br

Published by: www.lawyer-monthly.com – June 4, 2024