Contributed By Licks Attorneys
Brazil is a civil law country that has adopted a model of civil procedure combining adversarial and inquisitorial aspects. In 2015, Brazil updated its Rules of Civil Procedure. The updated rules establish a duty of co-operation for the parties and for the judge; allow the parties, in agreement, to determine changes to the procedure; grant more case management powers to the judges; and give more strength to the role of case law.
Brazilian legal procedures are conducted primarily through written submissions. It is customary for the attorneys to hold in-chambers meetings with the judges during motion practice about key aspects of their written submissions. However, in exceptional cases, there will be a hearing with oral arguments.
The Brazilian court system is divided, horizontally, between federal, state, electoral, military and employment courts. Electoral and employment courts are organised by a subject matter jurisdiction – respectively, electoral and employment law. Federal and military courts have both person-based and subject matter jurisdictions. For example, federal courts have jurisdiction over any lawsuit involving a federal government agency, regardless of the subject matter, as well as over lawsuits related to federal crimes and to violations of human rights law, regardless of the persons involved. State courts have jurisdiction over the cases that are not under the jurisdiction of the other four courts – a 'residual' jurisdiction.
Each court system has its own trial and appellate courts. Within each court system there can also be an organisation by subject matter jurisdiction. For example, state and federal courts can have civil courts, business courts, criminal courts, administrative courts, family courts, small claims courts, etc.
Brazil also has four Superior Courts, with jurisdiction to review decisions issued by appellate courts when there is violation of statutory law. They are the Superior Electoral Court, the Superior Military Court, the Superior Employment Court and the Superior Court of Justice. The Superior Court of Justice has jurisdiction over cases coming from both federal and state courts.
The purpose of these Superior Courts is to harmonise jurisprudence nationwide. Although their decisions are not in principle binding (save for some exceptions), trial and appellate judges usually pay deference to the interpretation of the law adopted by the Superior Courts’ justices.
Finally, Brazil has a Supreme Court which has jurisdiction both to review the constitutionality of laws enacted by the Congress, as well as to review judgments when there is an allegation of violation of the Constitution.
As a rule, court filings and proceedings are open to the public. Since 2011, Brazilian courts have been gradually adopting a system of electronic dockets. Most of the lawsuits filed nowadays have electronic dockets. Any attorney registered at the Brazilian Bar Association is entitled to access the dockets of any public lawsuit.
The Code of Civil Procedure of 2015, in accordance with the Brazilian Constitution, establishes that the judge can restrict access to the dockets only to the parties and their attorneys when (i) there is a public or social interest in the information in the dockets; (ii) the lawsuit relates to marriage, divorce, separation, civil union, fatherhood/motherhood, alimony or child custody; (iii) there is data protected by the constitutional right to privacy; and/or (iv) the lawsuit is related to an arbitration, as long as there is proof of the confidentiality established in the arbitration (Article 189).
The restriction can be imposed by the judge over the entire case – that is, the dockets and the information regarding the parties under litigation – or be limited to certain documents and filings that are deemed confidential. Unless there is such a restriction, all information and documents will be available to the public.
Only an attorney duly registered at the Brazilian Bar Association (the Ordem dos Advogados do Brasil – OAB) can be a legal representative in a lawsuit. Foreign lawyers cannot conduct cases before Brazilian courts. Moreover, the parties in a dispute must be represented by a Brazilian attorney when appearing before court, either to submit a filing and/or for a hearing. The exception is the small claims courts and the employment courts, which allow the parties to act without legal representation. Brazil has a very closed market for legal services, only allowing foreign firms to render services in Brazil regarding foreign law.
Litigation funding is permitted and there are no legal restrictions.
Any type of lawsuit is available for third party funding. Intellectual property cases might see a slightly higher average of litigation funding cases.
Third party funding is available for both plaintiff and defendant.
There is no specific amount a funder will fund.
A third party funder can cover some of the attorneys' fees or every single cost involved in the litigation.
Contingency fees are permitted.
There is no limit.
In general, there are no requirements related to pre-action conduct. The plaintiff of a lawsuit is not obliged to send a pre-action letter to the defendant prior to filing the case before court.
However, limitation is imposed in cases against government entities, when it is required that the plaintiff prove that they first tried to pursue their right with the public administration, although they are not required to exhaust all possible administrative appeals. For example, when seeking a social benefit, the plaintiff can only go to court when they can show that they filed an administrative request, but it was denied or not responded to, or that the social security agency always denies similar requests. As another example, a patent applicant can file a lawsuit after the patent office publishes any acts showing its intention to deny a patent. However, patent applicants are not required to file administrative appeals to the patent office seeking to overcome the final rejection; once the patent has been denied by the examiner, they can go to court.
The statute of limitations in Brazil is regulated mainly by the Civil Code and prescribes different limitation periods depending on the case. As a rule, the limitation period to bring a claim is ten years, whenever the law has not prescribed a smaller period. The Civil Code itself defines the situations in which the limitation period is one, two, three, four or five years. For example, the limitation period for a damage compensation suit is three years. The limitation period to challenge administrative acts is five years.
What triggers the limitation period is the act of violation of the material right. The limitation period can be stayed or interrupted under certain conditions.
When the federal government and/or its agencies are involved, the case will be heard by federal courts. Commercial disputes between private parties must be filed before state courts.
The initial complaint must contain (i) the identification of the court where it is being filed; (ii) the identification of the parties; (iii) the facts and legal grounds; (iv) the claims, which must be as specific as possible; (v) the value assigned to the matter (relevant for calculation of court’s fees and future assessment of attorneys’ fees); (vi) the indication of the evidence the plaintiff wishes to submit in support of their allegations; and (vii) a confirmation of whether or not the plaintiff wishes a conciliation hearing to be scheduled by the judge.
With the initial complaint the plaintiff must file all documentary evidence they have, under the penalty of preclusion. It is possible to file additional evidence in a later stage of the case, if the party can show that the evidence was not available at the moment of filing of the initial complaint.
The plaintiff can amend the initial complaint until the case management stage, before the production of evidence starts. However, after the defendant has been served, an amendment can only be made if the defendant agrees with it.
The service of process in Brazil is the responsibility of the court. As a rule, service is made through the postal service, with the court sending by registered mail a copy of the initial complaint and of the judge's order of service, containing information about the term within which to submit an answer to the complaint, as well as the address of the court.
Alternatively, in cases provided by the law, or when the plaintiff requires, or when the service by mail cannot be completed, the court shall determine the service by an officer of the court.
When the defendant resides outside of Brazil, service is made either by a letter rogatory or by diplomatic means between central authorities, depending on whether Brazil has an agreement with the country where the defendant can be found.
The term for the defendant to present an answer to the complaint starts once the copy of receipt of the letter of service, or the certification by the officer of the court, or the copy of the letter rogatory, is attached to the dockets.
If the defendant does not present an answer to the complaint within the deadline, the allegations of fact made by the plaintiff are presumed to be true. This presumption of veracity is not applied when (i) there two or more defendants, and at least one of them responds to the lawsuit (in which case the presumption of veracity would only be applied to allegations of fact that are not related to that defendant and, consequently, were not responded to); (ii) the case relates to rights that cannot be subjected to settlement; (iii) the plaintiff failed to present an exhibit deemed essential to prove a certain fact; and/or (iv) the allegations of fact made by the plaintiff were not likely to be true, or are contradicted by the evidence in the dockets.
Despite the presumption of veracity, the defendant can join the lawsuit at any point, and participate in all procedural acts moving forward. The defendant can, for example, participate in a technical examination ordered by the court, submitting questions to the court-appointed expert and nominating technical assistants. The defendant also can file appeal(s) against the trial judgment, or other appealable decisions rendered in the process.
Collective actions are available in cases connected with damage caused to the environment, consumers, historical sites, or any other collective interest.
There is no requirement to provide clients with a cost estimate.
There are several interim applications/motions that can be filed by the parties before a trial judgment is rendered, not limited to case management issues. The parties can request a preliminary injunction and/or a provisional remedy at any point of the legal process. Within the scope of the preliminary injunction and of the provisional remedy, the court can determine any measure of enforcement to secure compliance with the court’s order – such as a daily fine, search and seizure, etc.
Other examples of motions that can be filed by the parties, related to case management issues, are a motion to change the venue (which can be filed by the defendant), a motion to change the court-appointed expert (when the expert is biased or lacks the necessary knowledge to perform the work), and a motion to change the judge (when the judge is biased), amongst others.
The judge can render an early judgment, following the pleading phase, when the case does not require additional taking of evidence, or when the defendant fails to respond to the complaint and there is no request for taking of evidence. It is also possible for the judge to render an early judgment on some of the issues that are found indisputable or do not require additional taking of evidence (the so-called 'partial early judgment').
The trial judgment will not comprise a substantive hearing of the claim only in certain situations prescribed in the Brazilian Code of Civil Procedure. They relate essentially to the lack of procedural requirements necessary for a judgment on the merits.
Usually a request for an early judgment, partial or not, or for the case to be struck out, will be made by the defendant in the answer to the complaint, or by the plaintiff in the reply to the answer. However, even when such request has not been made expressly by any of the parties, the court can render an early judgment or strike out the case when the statutory requirements, explained above, are met.
If the court does not render a partial early judgment after the pleading phase, all claims will most likely only be decided in the trial judgment. Nevertheless, the parties can, at any moment during the legal process, make a request to the court to decide on a preliminary claim.
There are three different ways through which third parties that have not been named as a plaintiff or defendant can join a lawsuit. First, there is 'assistance', though which a third party holding a juridical interest in the dispute may ask to join the lawsuit as an assistant to the party they wish to win. Any of the parties can oppose the request, in which case the judge shall render a decision granting or denying the intervention. Second, there is 'denunciation of the dispute', through which the plaintiff or the defendant asks the court to summon a third party to join the lawsuit. This denunciation can be made in relation to the seller of a good purchased by the denouncer, and that is being disputed in a suit; and to the person who is obliged, by the law or by contract, to compensate the losing party in a suit. Third, there is 'call to the process', which can be made by the defendant to call to the process the main debtor or the co-debtor to a debt collection suit.
When the plaintiff is a foreign person or legal entity with no residence in Brazil, they must file a security deposit to cover expenses and attorneys’ fees in case they lose the suit. Usually the court will set this sum of money at between 20% and 30% of the value assigned to the case. This bond is dismissed when the plaintiff’s country and Brazil are parties to a treaty prohibiting procedural bonds such as this (for example, The Hague Convention on International Access to Justice).
Interim applications and motions filed within a legal process do not have any costs, with the exception of motions to enforce a trial judgment.
The timeframe depends on the type of motion, though rarely will it take more than two months for the court to render a decision. Preliminary injunction applications, for instance, are usually decided within one week.
There is no discovery or disclosure in Brazil.
As a general rule, each party has a burden of proof over the allegations upon which their claims or defences are based. Therefore, each party is, in principle, responsible for submitting the written evidence to support their claims, or to request the production of evidence by the court – for example, court-appointed examination, judicial inspection or oral witness testimony.
The court can also order any of the parties to present a document in their possession, either ex officio or upon the other party’s request. The court will not accept the party’s refusal to exhibit the document when they have a legal obligation to exhibit the document, when they have made reference to the document in their submissions, or when the document is common to the parties. The court can set any measure of enforcement to secure the exhibition of the document, such as a daily fine and/or search and seizure of the document. If even with such measures the document is not presented or found, the court will apply a presumption of veracity over the factual allegations intended to be proven through that document.
Brazil has very broad rules for attorney-client privilege (also referred as 'professional confidentiality'). Any information known by the attorney can be subject to attorney-client privilege. In-house counsels (when they have a Bar) also have attorney-client privilege.
In addition to legal privilege, a party may refuse to disclose a document when it may violate the honour of the party itself or of a third party, when it may represent a risk of criminal prosecution, or when the judge evaluates that there are other serious reasons that justify the refusal.
Injunctive relief is always available as a primary remedy for violation of a legal or contractual obligation. It is often requested in intellectual property cases. Injunctive relief can be granted on a preliminary and/or permanent basis. For preliminary injunctions, there are two requirements: likelihood of success on the merits; and risk of irreparable harm if the preliminary injunction is denied.
Additionally, the court shall not grant a preliminary injunction when there is a risk of irreparable harm to the defendant. There are no requirements for the granting of a permanent injunction. If the court finds in favour of the plaintiff to establish that the defendant is bound to a duty to abstain from the undertaking of an act, then it shall grant the permanent injunction. Only in exceptional cases, when the defendant has already undertaken the act from which they should have abstained, will the court convert the injunctive relief into a monetary compensation. The court can award any type of injunction necessary to secure the protection of the right, as well as any measures to enforce the injunctive order (for example, search and seizure, daily fine, etc).
The plaintiff may file a complaint with a request for an ex partepreliminary injunction based on urgency. This request is usually decided by the court within one week from filing. Alternatively, the Code of Civil Procedure provides for a motion that may be filed before the main action. The plaintiff files a complaint containing only a simple description of the facts and the request for the ex parte preliminary injunction, as well as the indication of the claims. Once the preliminary injunction has been granted, the plaintiff has a 15-business-day term to amend the complaint, turning it into a main action. If the preliminary injunction is denied, though, the plaintiff will have five business days to make this amendment. In both situations (ie complaint with an ex parte preliminary injunction request, or motion for an ex parte preliminary injunction), the case can be filed outside of regular business hours if there is a risk of loss of the right, or of the good that is being sought. A judge on call will then decide whether to grant an injunctive relief or establish that the decision can wait for the following business day.
A provision of the Code of Civil Procedure expressly allows the granting of ex parte preliminary injunctions. In intellectual property cases, this possibility is reinforced by a special provision of the Brazilian IP Statute (Law 9,279/96).
Applicants might be held liable for damages suffered by the other side, if the injunction is vacated. According to case law, the liability for damages arising from a preliminary injunction (ex parteor not) that is later vacated might require a finding of negligence or intent. Courts may request the applicant to post a bond to cover the potential future harm of the injunction order as a condition to have the injunction granted by the courts. This is common when the applicant is a foreign company with no assets in the country.
The2015 Brazilian Civil Procedure Code contains specific provisions regarding international cooperation in procedural matters. In theory, Brazilian courts may grant injunctive relief against worldwide assets of the respondent. The enforcement of such an injunction, however, will depend on the relationship between Brazil and the country where the assets are located (specific treaty, principle of comity, etc).
In general, injunctive relief can only be granted against the parties of the lawsuit. The exception to this rule is when the court orders a third party to present a piece of evidence in their possession and the third party refuses with no reasonable grounds. In this case, the court can impose any type of measure to secure compliance with the order, such as a daily fine or search and seizure.
If the respondent fails to comply with the injunction order, the court can impose any type of lawful measure to secure compliance. It is common, for example, for the court to impose a daily fine at the moment it grants the injunction. Other measures frequently used are the search and seizure of goods and the freezing of assets. According to the case law, the judge in a civil case cannot determine jail time for a respondent that fails to comply with an injunction, but only, if they understand this to be the case, if they notify the Prosecutor’s Office to criminally prosecute the person or legal entity in violation of the court order. The exception to this is cases against government entities, in which case the respondent can be subjected to jail time if they refuse to comply with court orders.
The process is primarily conducted in writing with the issuance of a final judgment after all evidence required has been taken. Only when there is the need for oral evidence – such as witness testimony, oral examination of the parties and/or oral examination of the court-appointed expert to clarify points of their written reports – will there be a hearing.
Judges usually receive the parties’ attorneys for in-chambers hearings whenever they file a request with the court. This is common, for instance, when there is a request for a preliminary injunction. Often these hearings might be ex parte. Judges also schedule a hearing with both parties and their attorneys before deciding on a preliminary injunction request.
Complex cases will have a case management hearing. In the hearing, the judge will decide on any pending procedural issues, define the controversial issues of fact that require additional taking of evidence, establish the means of evidence necessary to prove those controversial issues, and assign the burden of proof.
Jury trials are not available.
Parties have the right to present any legitimate evidence to support the case. Parties can file briefs asking the evidence to be dismissed or excluded from the dockets if it is illegal.
Plaintiffs and defendants should introduce expert evidence in writing during the pleading phase. In cases involving technical expertise, the court will almost always assign an unbiased expert to present a written report. This report is prepared based on questions submitted by the parties and by the court. The parties can designate their own technical assistants to meet with the court-appointed expert and present their arguments orally. After the court-appointed expert presents their report, the parties are summoned to submit their own reports, prepared by their technical assistants. When the court-appointed expert report fails to respond adequately to the questions, or when there is still doubt regarding any issue that falls within the scope of the examination, the court can (i) order the expert to present a supplementary report, (ii) order a new examination by another unbiased expert, and/or (iii) set a hearing for an oral cross-examination of the court-appointed expert.
Hearings and their respective transcripts are open to the public in general, unless the case is under seal.
Judges preside over and conduct hearings and trials. Before the new Code of Civil Procedure of 2015, judges would be responsible for questioning the experts, witnesses and the parties during the trial, based on the questions submitted in writing by the parties’ attorneys. Under the new system, the attorneys are the ones who question the experts, witnesses and parties during the trial. The judge shall render a judgment either at the end of the trial or within 30 business days (this being a non-peremptory term). In most cases, judges will only render a judgment after the trial.
Depending on the complexity of the case, and the parties involved, an estimated timeline from commencement to trial is two to five years.
There is no need to have court approval for settlements.
The fact that a lawsuit was settled cannot be confidential, unless the case is under seal. This is because, when the parties settle, the court will render a judgment dismissing the case without an examination of the merits. This judgment is a matter of public record. However, the terms of settlement can remain confidential.
Settlement agreements are enforceable like a final judgment decision by courts. A party can file an execution proceeding to enforce the terms of the agreement.
Settlement agreements can be set aside if one of the parties can show that the consent was obtained through coercion.
Preliminary and permanent injunctive relief (any type thereof) and damages are the remedies available to a successful litigation.
Punitive damages are not available in Brazil. Damages can be of three types: material, moral and social. Material damages compensate the injured party for the losses they suffered, including lost profits. There are no rules limiting maximum damages. Moral damages are intended to compensate the injured party for the suffering and stress caused by the injurer’s behaviour. In exceptional cases they can also be assigned to compensate legal entities for the damage caused to their 'good name'. Social damages can be found mainly in employment cases and aim at addressing socially reproachable behaviour by companies that cause a damage to the community.
The monetary compensation will be updated based on the inflation rate at the moment of payment. A legal interest of 1% per month will also be added counted from the date the defendant was served in the lawsuit.
If the defendant does not pay the damages set in the judgment voluntarily, the court can order any measure to enforce the payment, including freezing of assets.
A judgment from a foreign country that needs to be enforced in Brazilian territory must pass through a special proceeding before the Superior Court of Justice to be homologated before the measures of enforcement can be determined. The Superior Court of Justice verifies if the foreign judgment was rendered by a court with jurisdiction; if the defendant was duly served; and if the judgment is effective in the country where it was rendered, if it does not violate a Brazilian res judicata, if it is accompanied by an official translation, and if it does not contain a clear violation to the public order.
All trial judgments in Brazil can be appealed to a Court of Appeals with jurisdiction to perform a review on both the evaluation of evidence and assessment of facts, and the application and interpretation of the law. Additionally, judgments rendered against the government under certain situations are subjected to a mandatory appeal. That is, even if the government does not file an appeal against the unfavourable trial judgment, it will be sent for a re-appreciation by the Court of Appeals. Against the appellate judgment, the disfavoured party can file an appeal to a Superior Court, when there is a violation of law, and/or to the Supreme Court, when there is a violation of a constitutional provision. Parties can also file motions for clarifications of any decision when there is an omission, contradiction or obscurity in it, as well as interlocutory appeals against decisions rendered in the course of the suit.
An appeal to a higher court – such as to a Superior Court or to the Supreme Court – is allowed when there is a demonstration of the violation of a Statute or violation of the Constitution.
A party has a 15-business-day term to file an appeal. This term starts counting from the date that party was notified of the decision/judgment they intend to appeal.
The Court of Appeals carries out a full review of the first-instance decision and may explore points and arguments that, although raised before the trial court, were not considered in the decision that is being appealed. Appeals usually have hearings where appellate judges hear oral arguments from attorneys and may ask questions.
Appeals are granted as a matter of law. The parties have the right to appeal.
Appellate courts leave the enforcement of judgments to the trial court.
The losing party is required to reimburse the prevailing party for court fees, certain expenses and attorneys’ fees. The recoverable expenses are the compensation for travelling for a hearing, the prevailing party’s technical assistant fees, and the compensation of witnesses for attending the trial.
The losing party is required to pay for attorneys' fees capped at 20% of the amount in dispute. This is in addition to the agreement between the attorney and their client.
Interest is awarded on costs, similar to the way damages are calculated: 1% per month but counting from the date the judgment became a res judicata.
Alternative dispute resolution (ADR) is becoming a trend. The 2015 Brazilian Code of Civil Procedure encourages the use of ADR, particularly mediation and conciliation.
The 2015 Brazilian Code of Civil Procedure establishes a compulsory conciliation hearing between the parties at the beginning of the process, unless both parties state they have no interest in conciliation. However, some judges dismiss this hearing when, even without both parties expressing refusal, they understand that the chances of settlement are nonexistent. There are no sanctions for a party unreasonably refusing ADR – only for when a party states they want a conciliation hearing but does not present a proposal in good faith, since this is seen as an attempt to unduly delay the suit.
There are several institutions offering ADR in Brazil. Arbitration and mediation are getting more and more attention.
The Brazilian Arbitration Act (Law 9,307/96) establishes rules governing its use. According to said Act, arbitral awards have the same legal status as court judgments, meaning they do not require a homologation by a court of law to be enforced.
Arbitration is not allowed when the right under dispute is not subject to settlement by the parties.
The parties can seek the annulment of an arbitral award when (i) the arbitration clause is invalid; (ii) the person who rendered the award could not have been an arbiter; (iii) the award lacks the legal requirements (that is, a report summarising the case, the legal and factual grounds of the award, the decision, and the date and place); (iv) the award surpasses the limits of the arbitration clause; (v) corruption is proven; (vi) the award is rendered after the deadline set; or (vii) the principles of due process were not observed.
Domestic arbitral awards can be enforced in the same way as trial judgments – through a motion for enforcement filed before trial courts. Foreign arbitral awards follow the same procedure as foreign trial judgments – they have to be homologated by the Superior Court of Justice before the party can seek measures of enforcement before trial courts.