Antitrust Litigation 2020 Comparisons

Last Updated September 18, 2020

Law and Practice

Authors



Araújo e Policastro Advogados was founded in 1962 and is a full-service law firm with headquarters in the city of São Paulo, Latin America’s main business and financial hub. The field of private antitrust litigation in Brazil started to develop after partner Bruno Peixoto elaborated and filed the first-ever recovery action for antitrust damages in the country as well as the first follow-on collective action for cartel damages. Bruno Peixoto was also the first lawyer in Brazil to devise and conduct an international litigation strategy to recover cartel damages from a global cartel on behalf of corporate clients. Bruno has devised and implemented global strategies which have included parallel and concomitant legal actions in several jurisdictions, including the United States, the Netherlands, the United Kingdom and Brazil. Since then, the antitrust and competition team has fostered the debate on the development of legal and procedural tools to encourage injured parties to claim damages for anti-competitive practices.

Antitrust litigation is a hot topic in Brazil. Infringement decisions from Brazil’s antitrust authority (Conselho Administrativo de Defesa Econômica or CADE) are expected to be followed by multiple private actions for damages, especially in cases of collusive behaviour. There are indeed dozens of active antitrust litigation cases in Brazil, including collective actions for cartel damages.

Following a recent trend in the European Union, awareness concerning the right of action for damages derived from anti-competitive practices has substantially increased both in the legal and business communities in the last few years – although the statutory basis for private actions has been established since 1994. 

In the wake of the implementation of the European Union Directive on Damages Actions, CADE decided to adopt measures to promote private antitrust enforcement as well. Accordingly, in 2018, CADE issued a regulation concerning disclosure and access to evidence from its investigations files. Apart from evidence related to leniency agreements and settlements, documents gathered in the course of administrative proceedings may be disclosed by CADE after it issues a final decision. Indeed, CADE has included references to injured parties in its infringement decisions and has even sent notices to injured parties concerning infringement decisions.

An intense debate on the increasing relevance of private antitrust actions gave rise to a proposal to amend the Brazilian Competition Law in order to foster private litigation. To date, Bill No 11,275 of 2018 is one step away from being approved and coming into force. Recently approved by Brazil’s Senate, it advances private antitrust enforcement by: 

  • introducing double damages;  
  • introducing alternative dispute resolution; and 
  • codifying developed case lawon issues such as limitation and pass-on defence.

Double Damages

If the bill of law is approved by the House of Representatives as well, double damages will be applicable to recovery actions for antitrust damages but only against parties that have neither executed a leniency agreement nor subsequently settled with CADE. The goal of these provisions is to heighten the deterrence effects of private enforcement.

Arbitration

In order to significantly reduce the duration of follow-on recovery proceedings, the Bill also establishes that parties interested in settling investigations with CADE will agree to submit private disputes on antitrust damages to arbitration provided that a claimant agrees or requests it. This requirement does not apply to parties that have executed leniency agreements with CADE.  

The new provision only solidifies arbitration as an alternative way of resolving private antitrust claims. Therefore, if the aggrieved parties still prefer to submit their claims to a Brazilian court, they will be allowed to resort to this for the resolution of their dispute.

Codification of Established Case Law

Finally, the Bill codifies the established case law from Brazil’s high courts on limitation and on the passing-on defence and defendant’s burden to prove it providing specific evidence and effectively demonstrating that the claimants passed on the overcharge in the settings and circumstances of each individual case. According to this Bill, the statute of limitations period starts only after the victim is unequivocally aware of the infringement, including its consequences, and the burden of proving the pass-on lies with the defendant (see 2.4 Burden and Standard of Proof and 4.3 Limitation Periods for a description of the precedents from the courts of law). 

Indeed, the aforementioned bill of law is perceived as an important incentive to the development of private antitrust litigation in Brazil, enshrining an efficient regime to seek compensation for competition damages.  

There are clear statutory bases for claiming damages from competition infringements in Brazil. The Federal Constitution provides the grounds for the right to redress. With regard to damages for anti-competitive conduct, the Competition Law (Federal Law No 12,529 of 2011), the Civil Code (Federal Law No 10,406 of 2002), and the Consumer Protection Code (Federal Law No 8,078 of 1990) apply and regulate related matters.

Federal Constitution

According to Article 5 (v) of the Federal Constitution, the right to redress shall be perceived as a fundamental right under the Brazilian legal system. In other words, that it is an absolute right shall be a principle guiding the enforcement of the law. 

The Federal Constitution also sets forth in Article 170 that the principles of free enterprise and free competition shall guide domestic economic relations and the economic environment. The abuse of dominant position consubstantiated in conduct to dominate markets, eliminate competition and arbitrarily increase profits is expressly prohibited in Article 173 (iv). While the Federal Constitution sets forth broad provisions applied to competition between market players, the Competition Law regulates more comprehensively.  

Article 36 of Brazil’s Competition Law (Federal Law No 12,529 of 2011) sets out conduct that, regardless of fault, constitutes infringement of the economic order. Article 47, in turn, provides that parties injured by anti-competitive conduct are entitled to seek full redress for their losses as well as injunctive relief.  

Brazil’s former competition law (Federal Law No 8,884 of 1994) included exactly the same provisions and already provided grounds for both follow-on and standalone claims for damages and injunctive relief. The enactment of the new Competition Law was a milestone for private antitrust enforcement, since it redesigned the Brazilian System for Competition Defence, boosting the detection of cartels and competition infringements.

Civil Code

Article 927 of the Civil Code is also applicable as a general provision concerning the right to compensation for losses from unlawful conduct.

Consumer Protection Code

Lastly, with regard to actions brought by consumers – defined as individuals or undertakings who purchased a product or service as the ultimate beneficiary – the Consumer Protection Code (Law No 8,078 from 1990) also applies. Notably, consumers may sue for double damages pursuant to the Consumer Protection Code.  

Although there has been some debate over whether specialist courts should be created to adjudicate competition litigation cases, the state courts presently have jurisdiction to hear private antitrust actions. However, when a federal agency is party to the litigation, a federal court will have jurisdiction to adjudicate the case.

Regarding territorial jurisdictionclaimants may opt for the legal venue where the injury occurred or where one of the defendants is domiciled.  

In such context, the debate on whether competition litigation cases should be allocated to specialist judges and courts has gained traction in the States of São Paulo and Rio de Janeiro. In the State of São Paulo specifically, there has been substantial discussion on creating specialist courts of first instance and specialist panels at the Court of Appeals to adjudicate antitrust law disputes as well as international trade litigation. The State of São Paulo Court of Appeals has had a very successful experience with the creation of specialist Courts of First Instance and a specific chamber for the enforcement of arbitral awards as well as for the adjudication of complex corporate law issues. The Court Appeal created such a specialised chamber in 2011 to rule on corporate disputes and appeals in matters, such as industrial property claims and unfair competition cases regulated by the industrial property law. The establishment of both the lower courts and the chamber within the Court of Appeals enhanced the quality of decisions and discussions, and also decreased the length of proceedings related to such matters. Accordingly, similar results are expected with the implementation of such specialist Courts of First Instance and chambers to rule on antitrust law and trade disputes.  

Evidentiary Value of CADE’s Decision 

CADE’s decision as "unequivocal evidence"

The Brazilian courts have ruled that claimants may rely on CADE’s decision to prove an infringement. The courts have ruled that CADE’s decision represents "unequivocal evidence" of an antitrust infringement (eg, AHMG v Air Products Brasil Ltda, Court of Appeals of the State of Minas Gerais, Interlocutory Appeal No 1.0024.09.709934-5/006, 13th Civil Chamber, judged on 26 April 2012). Consequently, to rebut CADE’s ruling in follow-on actions for damages, defendants would first need to successfully challenge CADE’s decision on procedural grounds and have it vacated before a competent Brazilian federal court. 

These positions previously adopted by the Brazilian courts are based on the high degree of specialisation of the antitrust authority, which has jurisdiction to investigate and punish anti-competitive conduct, as well as rulings on the principles of judicial economy and the reasonable duration of proceedings. 

Deference to CADE’s findings of fact

Furthermore, Brazil’s Supreme Court has recently issued a decision stating that courts should defer to CADE’s findings of fact, given CADE’s expertise and capability to determine whether investigated conduct produced anti-competitive effects on the domestic market. As a consequence, Brazilian courts should not revisit CADE’s findings on the merits of the anti-competitive nature of the conduct and its detrimental impact on the market (Comal Combustíveis Automotivos v CADE, Supreme Court, Regimental Appeal on Extraordinary Appeal No 1.083.955/DF, issued on 28 June 2019). 

CADE shall be notified by the courts about every action filed for antitrust damages and is allowed to intervene.   

Evidentiary Value of CADE’s Settlements

According to CADE’s internal regulation, in order to execute a leniency agreement or to settle a cartel investigation (ie, by means of consent decree) with CADE, the investigated party is obliged to: 

  • confess and acknowledge participation in the unlawful conduct; and 
  • provide substantial evidence of that unlawful conduct (eg, documents and reports containing information that might help CADE to identify other participants). 

The Brazilian courts have upheld the legality of the requirement to acknowledge participation in the infringement, since this constitutes an essential condition to settle with CADE (eg, Posto Oliveira v CADE, 6th Panel, Interlocutory Appeal No 007598-57.2013.4.01.000 – Federal District, judge-rapporteur Jirair Aram Meguerian, judged on 4 February, 2014). 

Claimants shall present evidence demonstrating the: 

  • existence of anti-competitive conduct; 
  • individual damage; and 
  • causation.  

As previously mentioned in 2.1 Legal Basis for a Claim, the Competition Law establishes strict liability in cases of anti-competitive conduct. Additionally, under the Civil Code, employers and companies are strictly, jointly and severally liable for redressing losses caused by their employees or executives. 

Under the Brazilian Civil Procedure Code, defendants must produce evidence to refute the alleged claim. Defendants bear the burden of proving facts that hamper, modify or extinguish claimants’ right to compensation. Passing on, therefore, is a matter for defendants to prove, as recently affirmed by the Court of Appeal of São Paulo.  

Both parties may use all legal and morally legitimate means to prove facts grounding the claim or the defence (eg, depositions, documentary evidence, oral testimonies, expert evidence, disclosure of documents, and judicial inspections). 

Ruling on a private action following a CADE decision imposing fines on the cement industry, the Court of Appeal decided that defendants bear the burden of providing specific evidence and effectively proving alleged passing-on, and courts should impose the burden on them from the start of the proceedings (Paez de Lima Construções e Comércio Ltda e outros v Votorantim Cimentos S/A e Lafargeholcim (Brasil) SA, TJ-SP, Appeal No 1050035-45.2017.8.26.0100, 19th Private Law Chamber, adjudicated on 28 August 2019). 

Courts regularly adopt a preponderance-of-evidence standard, although there is no generally applicable standard of proof and judges may rely on their analysis and assessment of the evidence produced by the parties during the proceeding.

The right of action for damages is broadly conferred by the Competition Law on every factually injured party, without distinguishing between direct and indirect purchasers. However, indirect purchaser claims face substantial obstacles as, in principle, they bear the burden of proving causation and individual damages

Therefore, indirect purchasers are also entitled to claim compensation for any damage they may have suffered. Courts require, however, that claimants prove the causal relationship between the losses and the infringement to award them damages. 

Although duration varies according to the specific features of each case, in complex antitrust litigation, it may take three to five years for a Court of First Instance to reach a decision. A decision from a Court of Appeal may take one to two additional years. Moreover, when it is possible to appeal to the Superior Court of Justice (Superior Tribunal de Justiça or STJ) or the Supreme Court, it takes at least two additional years.  

A bill of law recently approved by the Senate seeks to address the length of private antitrust actions for damages by fostering alternative dispute resolution. According to its provisions, it will be a requirement when settling investigations with CADE, that applicants agree to submit damages claims resulting from the investigated conduct to arbitration (provided that the claimants agree to and request it).  

Class Action

A "collective action for defence of homogeneous individual rights" is a hybrid of representative and opt-out class actions. It is brought by adequate representatives – frequently trade or consumer associations that meet certain requirements. It aims to obtain damages or injunctive relief for a class of claimants.

Injured parties may opt out in order to file an individual action. Conversely, parties that filed individual actions before the class action have the option to request that their actions be stayed until a final decision concerning the collective claim is issued, which will be binding with regard to their claims only if it is decided in favour of the claimants.  

Representatives seek a broad declaratory decision establishing that defendants must pay damages to a class. Subsequently, the injury suffered by each member of the class is collectively or individually quantified and collected through liquidation and enforcement proceedings.  

Public Civil Action

Public civil actions aim to prevent or remedy conduct that affects collective or diffuse interests not specifically individualised, and although it may also be brought by associations, it is more often brought by a public prosecutor’s office, seeking payment of compensation to a public fund.  

In cases of anti-competitive conduct, both actions may be brought as either follow-on or standalone actions.  

Parallel Collective Actions

It is not uncommon for the two types of collective actions to be brought in parallel. For instance, while a federal or state public prosecutor's office may bring a public civil action against an alleged cartel seeking injunctive relief and payment of a sum to a public fund in order to remedy societal losses, a trade association may initiate a collective action seeking individual damages for a class of local or domestic purchasers.  

The collective proceedings above are also regulated by provisions from the Brazilian Consumer Protection Code (Federal Law No 8,078/1990), the Collective Public Actions Act (Federal Law No 7,347/1985), and the Brazilian Civil Procedure Code (Federal Law No 13,105/2015). 

Brazilian law provides standing to file these claims to adequate representatives, such as trade or consumer associations that meet certain requirements and the public prosecutor’s office. See 3.1 Availability for further details.  

There is no certification process under the Brazilian legal system, although representatives must meet certain criteria and may face scrutiny from the courts on whether they have legitimacy to represent a class of claimants and the interests at stake

There are several ongoing collective proceedings in Brazil. The first collective action for cartel damages dates from 2008. Following CADE's decision, the Associations of Construction Companies of Minas Gerais and Goiás States went to court to claim damages arising from the "long-steel cartel".   

Similarly, the Associations of Hospitals of the States of Minas Gerais, Paraná and São Paulo also filed collective actions against the "medical gases cartel". The plaintiffs are claiming injunctive relief and due redress of injuries caused to hospital and other health entities they represent.   

Out-of-court collective settlements do not require judicial authorisation but may require approval from a public prosecutor’s office, especially in cases of public civil actions.  

Strikeout and summary judgment decisions may be issued on procedural grounds, such as, lack of standing to sue, absence of legal interest or unlawfulness of a claim. Those grounds concern general requirements for every judicial action under the rules of civil procedure. 

According to the Civil Procedure Code, Brazilian courts may have jurisdiction in cases where: 

  • a party is domiciled in Brazil or as an undertaking it has a subsidiary in Brazil; or  
  • relevant facts or acts giving rise to the claim occurred or were performed in Brazil; or 
  • a legal obligation shall be fulfilled in Brazil. 

In cases with multiple defendants domiciled in different places, plaintiffs may select one of these places. If a public entity takes part in the lawsuit, a federal court will have jurisdiction to hear the claim. 

With regard to the applicable law, Brazil’s Competition Law applies to actions concerning anti-competitive conduct that produced, or had the potential to produce, direct or indirect effects on the domestic market.  

Under the Brazilian Civil Code, a three-year limitation period applies to individual actions, and a five-year limitation period applies to public civil actions and class actions. 

When Does the Limitation Period Begin? 

"Unequivocal knowledge" standard

Brazilian courts have construed the statute-of-limitation provisions in the sense that the limitation period starts to run when the aggrieved party obtains "unequivocal knowledge" of: 

  • the act of tort;
  • the identity of the offender;
  • the existence of the damage; and
  • the causal relationship between the unlawful act and the damage. 

This rule has become established case law. 

Case law from Brazil’s STJ has indeed established that the limitation period for damages actions cannot start to run before a claimant has become "unequivocally aware" of both the infringement and its consequences, namely the impact of the unlawful conduct on its individual rights.  

Infringements against the economic order, such as the formation of cartels, are usually kept secret so that their participants can maintain uninterrupted temporal control over them, and so the aggrieved parties are usually at a disadvantage in terms of access to information. 

CADE infringement decision 

Applying the case law from the STJ mentioned above, the Court of Appeal of São Paulo, for instance, ruled in follow-on damages actions that the limitation period cannot start to run before CADE issues a final infringement decision (Cia de Cimento Itambé v Mendes Júnior Engenharia SA, Interlocutory Appeal No 2103889-09.2018.8.06.000, 32nd Private Law Chamber, judged on 14 February 2019).It is at this point that conduct is recognised as being in violation of the Brazilian Competition Law. Claimants are presumably aware of the illegal nature of the conduct at this point, when they become able to seek redress.  

Criminal investigations

Under the Brazilian Civil Code, a criminal investigation suspends the limitation period for initiating private antitrust actions. Claimants can also rely on a decision held in a criminal proceeding to bring an action for damages against an undertaking and its executives who participated in anti-competitive conduct, especially considering that under the Civil Code, employers are jointly and severally liable for redressing losses caused by their employees.  

Disclosure of documents is court-supervised and available to a reasonable extent. 

Regarding early discovery proceedings, claimants may initiate a court proceeding for primary or immediate production of evidence, provided that:  

  • there is reasonable concern that it may become impossible or difficult to obtain evidence or prove specific facts during the damages action itself; or 
  • the evidence sought is relevant for triggering a settlement agreement; or  
  • prior production of evidence may make it possible to avoid filing an action.  

Claimants may also request access to CADE’s files. The Brazilian Federal Constitution enshrines the fundamental right to access administration files, and the principles of transparency and publicity guide the public administration, which includes the Brazilian antitrust watchdog.  

Considering this provision, the STJ recently imposed on CADE the duty to disclose an executed leniency agreement and consent decrees to support a damages claim brought against a cartel in the industry of compressors for refrigeration (Electrolux do Brasil SA v Whirlpool SA, Special Appeal No 1.554.986-SP, Third Panel, adjudicated on 8 March 2016).  

This precedent triggered a debate on the balance of public and private antitrust enforcement. In 2018, the Brazilian antitrust authority created a disclosure policy. According to this policy, documents gathered in the course of administrative proceedings may be proactively, or under request, disclosed by CADE after it issues a final decision. Aggrieved parties may rely on them to substantiate their claims.  

The regulation, however, does not allow for release of applicants’ statements related to leniency agreements and settlements. As this regulation ended up narrowing the scope of the STJ’s decision, it is expected to face scrutiny from the federal courts. 

Legal professional privilege encompasses any communications and files related to an attorney-client relationship. Counsel may lawfully refuse to provide the courts with documents and to testify about facts protected by legal privilege. 

In order to encourage the filing of private antitrust claims, CADE has issued a regulation introducing a disclosure regime for its investigation files. According to this regulation, CADE will proactively disclose part of its files upon issuing a final decision. However, documents that will remain sealed under the regulation include: 

  • pieces of evidence related to leniency agreements and settlements, and notable statements provided by applicants on the history of the unlawful conduct; and 
  • documents concerning trade secrets and confidential and unrelated business information.  

As already mentioned in 5.1 Disclosure/Discovery Procedure, a precedent from the STJ has established that CADE must disclose to claimants pieces of evidence gathered during its investigations, including information provided by beneficiaries of leniency agreements and settling parties, provided thatCADE has concluded its investigation and issued a definitive decision (Electrolux do Brasil SA v Whirlpool SA, Special Appeal No 1.554.986-SP, Third Panel, adjudicated on 8 March 2016). 

According to the precedent, such documents are not allowed, under the Federal Constitution, to remain perpetually sealed given their relevance to the public. CADE’s legal duty of confidentiality is exhausted after the CADE tribunal issues its final decision, at which point, the duty to provide information and documents to the judiciary branch is imposed by the Federal Constitution. 

Parties may employ witness testimonies to prove facts. Witness evidence is given orally, and cross-examination is allowed to a certain extent. Witness hearings are supervised by the judge presiding over the case, who may filter or bar certain questions. Witnesses may be compelled to testify (provided that their constitutional rights are safeguarded).

Claimants regularly rely on expert witness reports to prove the effects of anti-competitive conduct such as cartel overcharge and individual damages resulting from this.  

Expert evidence is normally produced by a court-appointed expert upon request of one or more parties, who typically also submit their own experts’ reports.  

Judges are also allowed to rule based solely on the reports from the parties’ experts and documents submitted by the parties, but producing joint statements and hot-tubbing are not common practices. 

In 2018, the Brazilian Secretariat for Promotion of Productivity and Competition Advocacy (Secretaria de Promoção da Produtividade e Advocacia da Concorrência or Seprac) issued guidelines detailing econometric methodologies for calculating cartel damages with the aim of facilitating private antitrust actions. This document is guiding courts in the production of expert evidence.

Scope of Compensation 

As a consequence of unlawful behaviour, injured parties may claim compensation for: 

  • actual losses;  
  • lost profits; and  
  • damage to a company’s "image" and "moral damage".  

Actual losses

The actual losses consist of the effective and immediate decrease in the victim’s assets due to the illegal act. In a claim for cartel damages, the actual losses are attributable to the cartel overcharge. 

Lost profits

Lost profits consist of the loss of income the aggrieved party would have achieved had it not been affected by the unlawful conduct.  

Moral damage 

Under Brazilian law, moral damage is awarded for a violation either of personal rights in relation to a person’s honour, or of the reputation, image and goodwill of a company or other legal entity. Likewise, the STJ’s Binding Precedent No 227 establishes that corporate entities have standing to claim moral damages. Therefore, moral damages are awarded to corporate entities whenever the infringement affects the off-balance sheet value of a company, including its name, reputation, credit, and tradition within that market. 

Furthermore, the STJ’s Binding Precedent No 37 sets forth the possibility of cumulative monetary and moral damages derived from the same fact. 

Double Damages 

Double damages may be awarded for claims brought by consumers under the Consumer Protection Code.  

Bill No 11,275

A bill of law currently under consideration at the House of Representatives is likely to expand the scope of double damages to other recoveries against cartels (see 1.2 Other Developments).

The passing-on defence is available, and defendants bear the burden of proving it.  

See 2.4 Burden and Standard of Proof

The Court of Appeals of the State of São Paulo recently reached a decision that it is not possible to assume that a cartel victim passed on the cartel overcharge. Pass-on must effectively be proved by defendants (Paez de Lima Construções e Comércio Ltda e outros v Votorantim Cimentos S/A e Lafargeholcim (Brasil) SA, TJ-SP, Appeal No 1050035-45.2017.8.26.0100, 19th Private Law Chamber, adjudicated on 28 August 2019). 

Statutory interest is payable on damages which must also be adjusted for inflation pursuant to the Civil Code.  

Pre-judgment interest applies in cases of torts and interest accrues from the date the unlawful conduct occurred, according to precedents of the STJ. Post-judgment interest is also applied, for eg, while a party appeals. 

Tortfeasors are jointly and severally liable for damages derived from unlawful practices as a general rule under the Civil Code.  

Furthermore, the Competition Law also provides for joint and several liability among undertakings of the same economic group, establishing, therefore, joint and several liability beyond classical parental liability. In addition, the Competition Law establishes that companies are jointly and severally liable with their officers for anti-competitive conduct. Pursuant to the Competition Law, these rules apply to both public and private enforcement. 

It is important to note that regarding cartel damages claims, all the different cartel members are jointly and severally liable for all the damages inflicted on the injured parties, regardless of whether the infringers have a contractual relationship with the claimant. Brazilian courts have ruled that cartel formation is a permanent, uninterrupted single crime, composed of a set of practices. Therefore, its participants are liable for all performed conduct and advantages obtained therefrom. 

Under the Brazilian Civil Code, defendants are entitled to seek contributions from other co-debtors or co-defendants in cases where one of them is obliged to pay claimants the entire amount of the awarded damages.

Granting interim remedy or preliminary injunctive relief requires that a claimant provide evidence of:

  • lawfulness of the alleged claim (fumus boni iuris); and 
  • risk to the usefulness of the lawsuit’s outcome (periculum in mora). 

The courts may also grant injunctions when a claimant has produced prima facie evidence supporting the claim, and the defendant does not produce evidence raising reasonable doubt.

Before the filing of a response and the statement of defence, judges must encourage the parties to settle the case during a conciliatory or mediation hearing that precedes the next step of the proceedings.  

Arbitration is available when parties expressly agree to submit the claim to an arbitration panel or sole arbitrator.  

The referral of the dispute to an arbitration panel may result from the establishment of an arbitration submission agreement or an arbitration clause. The former consists of a bilateral agreement whereby the parties undertake to submit the current conflict to an arbitration panel. The second entails the existence of a contract, in which the parties undertook to submit disputes arising from that contract to an arbitral tribunal. 

A bill of law recently approved by the Senate and currently under analysis in the House of Representatives provides that as a requirement for settling investigations with CADE, applicants must agree to submit damages claims resulting from the investigated conduct to arbitration provided that the claimants agree to and request it.  

Litigation funding is rapidly growing in Brazil as the Civil Code allows for the assignment of rights to third parties.  

The Brazilian STJ has held that the assignment of a right under dispute does not modify the standing to sue. This understanding is applicable when the assignment of credit occurs between the filing of a claim and the summoning of the defendant.  

After the service of process, the assignee can only replace the assignor in an ongoing private action with the defendant’s consent. Alternatively, the assignee may join the case as joint plaintiff or intervene as assignor’s assistant. 

Contingency fees are also available and may be assigned. The same applies tostatutory attorney's fees paid by the losing party in the amount of 10–20% of the amount under dispute.  

Court Costs 

A court award imposes on the losing party the obligation to reimburse the prevailing party for the costs and expenses advanced – in general, limited to administrative costs of court proceedings, compensation for travel expenses, fees of retained experts and travel expenses of witnesses. 

However, claimants in collective proceedings receive a waiver both from anticipating legal costs (including expert witness fees and expenses of pleadings, and paying attorneys’ fees and court costs if they lose). 

Attorney’s Fees

In individual claims, the losing party will bear the statutory attorney’s fees of the prevailing party, but not contractual fees. The statutory attorney’s fees must be stipulated as 10–20% of the value of the award or claim’s value, adjusted for inflation pursuant to the Civil Procedure Code.  

There are two main reasons for the existence of statutory attorney’s fees:

  • to discourage unnecessary litigation; and
  • to prevent people from being harmed by the expenses they incurred to plead their rights or defend themselves against a lawsuit brought against them. 

Appeals to the State or Federal Court of Appeals on both points of law and factual findings are available following interlocutory and final rulings by Courts of First Instance.  

In a Court of Appeals, a judge will report the case, and a panel of judges will hold an adjudication session on that appeal in which a ruling is issued. In the case of interlocutory decisions issued by the judge-rapporteur, motion for clarification and internal appeal are available.  

After a ruling from a Court of Appeal, parties may seek to appeal further – solely on the points of law – to the STJ when the Court of Appeal’s decision breaches a federal law and, to the extent that there is a constitutional issue involved, to the Supreme Court. At this stage of the proceedings, appeals on the facts are not available, and those courts will not analyse the case from a factual perspective. Internal appeals and motions for clarification are, however, available at this stage of the proceedings.  

Araújo e Policastro Advogados

758 Leopoldo Couto de Magalhaes Junior
4th Floor
Itaim Bibi
São Paulo

+55 11 3049 5700

+55 11 3078 6120

bpeixoto@araujopolicastro.com.br www.araujopolicastro.com.br
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Law and Practice in Brazil

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Araújo e Policastro Advogados was founded in 1962 and is a full-service law firm with headquarters in the city of São Paulo, Latin America’s main business and financial hub. The field of private antitrust litigation in Brazil started to develop after partner Bruno Peixoto elaborated and filed the first-ever recovery action for antitrust damages in the country as well as the first follow-on collective action for cartel damages. Bruno Peixoto was also the first lawyer in Brazil to devise and conduct an international litigation strategy to recover cartel damages from a global cartel on behalf of corporate clients. Bruno has devised and implemented global strategies which have included parallel and concomitant legal actions in several jurisdictions, including the United States, the Netherlands, the United Kingdom and Brazil. Since then, the antitrust and competition team has fostered the debate on the development of legal and procedural tools to encourage injured parties to claim damages for anti-competitive practices.