Contributed By E. Munhoz Advogados
Brazil is a civil law country that follows both adversarial and inquisitorial models. As an example, the parties are responsible for commencing Brazilian civil proceedings and establishing the contours of the issues under dispute. On the other hand, courts may have an active role in evidence production, choosing and determining ex officio the evidence production it deems relevant for the case.
Brazilian civil procedure is mainly conducted through written submissions by the parties and the court. All motions presented to the court must be in writing and procedural orders and all decisions are also provided and only effective in writing.
Brazilian civil procedure provides for a few hearings and opportunities for oral arguments. Unless parties object, in most proceedings there must be a settlement hearing before the defendant presents its response. Oral evidence, comprised of depositions of the parties, witness and experts (regarding experts, mainly after written reports have been submitted), is also produced in a hearing before the court, though generally introduced into the case records as a transcript. Finally, Brazilian litigation practice also allows and widely adopts ex parte meetings with the court, in which parties may present their arguments. However, because these meetings are not expressly provided for in the Civil Procedure Code (Law No 13.105/2015), the same arguments must be introduced in writing for courts to adopt them in their decisions.
The vast majority of Brazilian courts maintain case records electronically and are available for consultation and all submissions through the courts’ website.
The Brazilian court system is divided between federal courts, including both ordinary and special courts for certain subject matters, such as labour-related claims, and state courts. Federal and state courts adopt a two-level system with local trial courts and appellate courts. In counties where there are multiple trial courts these may administratively be assigned jurisdiction based on the subject matter of the proceeding, such as criminal, civil, corporate, social security and tax law, etc. There is a trend for more specialised courts within such counties, in particular regarding corporate law and related subjects, which is inspired by the good results achieved by the São Paulo business courts and other similar initiatives (eg, Rio de Janeiro business courts).
In addition to the two-level federal and state courts, there are superior courts which review appellate courts’ decisions in certain cases but that are also competent to hear original cases under certain limited circumstances.
Federal courts are divided into ordinary courts and special courts. Ordinary federal courts hear cases where the federal government, its branches, agencies or state-owned companies are involved or where federal law expressly provides for federal jurisdiction (an exception). Ordinary federal courts are organised by region, with each region having its own appellate court that hears cases coming from an area of jurisdiction that generally encompasses several states. Federal special court systems with jurisdiction based on subject matter, includes the labour courts, electoral courts and military courts, each of which has special rules that governs their proceedings and are divided into regions typically different from those of ordinary federal courts.
Each Brazilian state has its own set of state courts that hear the vast majority of cases (ie, all cases not subject to jurisdiction of the federal courts). In matters of internal organisation, each state can decide how to distribute its courts.
The superior courts in Brazil are the Supreme Court (STF), the Superior Court of Justice (STJ), the Superior Electoral Court (TSE), the Superior Labour Court (TST) and the Superior Military Court (STM). The TSE, TST and STM handle cases related to federal, electoral, labour and military courts, respectively.
The STJ reviews ruling from appellate courts from both the ordinary federal and state courts when the decision:
The STJ is also competent to originally hear claims against certain government officials, such as criminal actions against the governors of Brazilian states, as well as to domesticate foreign awards.
The STF is deemed the highest court in Brazil and reviews decisions of all other courts, including the STJ, when the decision violates the Federal Constitution or discusses the constitutionality of federal law, treaties, acts of local government or local law. The STF is also competent to originally hear certain constitutional claims as well as claims against certain government officials, such as criminal actions against the President.
Depending on the type of lawsuit and applicable court system, there is a different set of procedural law applicable in Brazil. For purposes of this guide we will limit our analysis to the rules applicable to civil procedures in federal and state courts, where the Civil Procedure Code applies.
Publicity of legal proceedings is a constitutional principle in Brazil, and as such the general rule is that case records, decisions and general information regarding proceedings are available publicly. However, there are certain exceptions in the Civil Procedure Code by which, upon request from the parties (or by default in very limited circumstances, such as matters pertaining to minors), either the court may seal an entire proceeding or certain documents or acts, including in the following situations:
We note, however, that courts – especially São Paulo business courts – have recently tended to deny confidentiality requests based on the fact that the lawsuit is related to arbitration, and interpret the exceptions more narrowly.
Attorneys licensed to practice law in Brazil by one of the state bar associations may represent clients and argue cases before any and all Brazilian courts without additional licences.
Except from attorneys licensed to practice law in Portugal, foreign-licensed attorneys are not allowed to represent a party in lawsuits in Brazil.
Litigation funding by a third party is not specifically regulated under Brazilian law; as such, it is not prohibited but there are no clear standards or restrictions to it.
In light of the absence of specific regulations, there are no clear limits on which types of lawsuits could be available for third-party funding (see 2.1 Third-Party Litigation Funding).
In light of the absence of specific regulations, both plaintiffs and defendants could be funded by a third party (see 2.1 Third-Party Litigation Funding).
In light of the absence of specific regulations, there is also no minimum or maximum amounts that may be funded by a third party (see 2.1 Third-Party Litigation Funding).
Third-party funders in Brazil typically consider funding court, attorney’s and expert fees. Because Brazil is a “loser pays” system, on occasion third-party funders may discuss supporting court imposed legal fees, although that is an exception.
Contingency fees are widely accepted and the market typically practises such fees in all sort of lawsuits. Despite being very common in practice, given the absence of specific regulations, there is no clear guidance regarding contingency fees (see 2.1 Third-Party Litigation Funding).
In light of the absence of specific regulations, there are no time limits according to which a party to the litigation should obtain third-party funding (see 2.1 Third-Party Litigation Funding).
There is no pre-action conduct required under Brazilian Law. To initiate a lawsuit, parties should present its pleadings provided that, concurrently or within 15 business days, they present a valid power of attorney and pay the court fees. If these requirements are not complied with, claims are dismissed.
In Brazil, statutes of limitations, called prescrição and decadência, are provided for under substantive law (eg, the Brazilian Civil Code). Therefore, the limitation periods and the events that trigger a limitation period depend on the subject matter of the claim. Among other substantive laws, the Civil Code, corporate law, the Criminal Code and the Consumer Code all provide for different limitation periods.
As an example, the general rule on the applicable statute of limitations applicable to civil liability is ten years from the event. There are several specific cases in the Civil Code, in which the limitation period is shorter (one to five years), such as the three-year limitation period regarding tort claims (responsabilidade extracontratual), rent or credit instruments (títulos de crédito) and the five-year limitation period for collections of contractually owed amounts in general (eg, loans).
Brazilian courts typically have jurisdiction over claims in which:
Regarding alimony obligations, Brazilian courts have jurisdiction whenever the creditor is domiciled in Brazil or the defendant has connections to Brazil and as to consumer matters, whenever the consumer is domiciled in Brazil.
Except for claims involving assets in Brazil, mentioned in items “iv” and “v” above, in which Brazilian jurisdiction is considered exclusive, parties may elect another jurisdiction (cláusula de eleição de foro). In such cases Brazilian courts should respect the parties’ agreement and reject the lawsuit on the basis of lack of jurisdiction, if the respondent successfully raises jurisdiction in its response (contestação).
The initial complaint (petição inicial) is the document filed by plaintiff to initiate a lawsuit. The initial complaint should contain:
After having filed its pleadings, the plaintiff may amend it:
In Brazil, adequate service of process is a validity condition to any proceeding and it is performed by the court and its officials after receiving the initial complaint.
As a general rule, service is performed by letter with return receipt. In specific cases or when service by letter is unsuccessful, service may alternatively be performed in person by an officer of the court, by public notice published in the official gazette, or by electronic means, when applicable. Defendants are immediately deemed served when presenting any motion on the case records.
A party outside Brazilian jurisdiction may be sued. Service of process in a foreign jurisdiction depends on the rules of international co-operation between Brazil and such country. For most jurisdictions, the court in Brazil typically issues a rogatory letter to the foreign courts asking for international co-operation to serve the defendant according to rules on service of process in that country, provided the foreign rules do not violate Brazilian public policy or constitution. Co-operation could be facilitated if Brazil has a bilateral agreement of international co-operation with such country.
If the defendant does not respond to a lawsuit timely after being properly summoned, the defendant will be in default (revelia) and the proceeding will move forward with all facts claimed by the plaintiff in its pleadings presumed truthful. The defendant may present motions in the proceeding at any stage after being in default but may only challenge legal matters or new facts claimed by the plaintiff.
The general presumption of truthfulness of facts claimed by plaintiffs against default defendants does not apply if:
Collective actions are permitted in Brazil and are mainly regulated by Law No 7.347/85 and the Consumer Code (Law No 8.078/90). Collective actions may be used to protect collective or diffuse rights (direitos coletivos e difusos) or individual rights that are common to a certain group of persons (direito individual homogêneo). Those rights are typically related to the environment, consumers, artistic, architectural or historical landmarks, economic order, ethnic, racial or religious groups, public and social welfare matters.
Legal standing for those actions is restricted to the Public Prosecutor, the Public Defender, the federal government, states and cities, certain other public entities as well as private associations which purpose relates to the claims and that have been incorporated for at least one year.
If a class action aims to protect individual rights, the lawsuit is conducted by a lead plaintiff and the outcome only affects the entire class if the claims are granted. If not, individuals could still individually present claims. Also, in class actions the collective final award concerns only the broad aspects that could have effects on individuals of the class, but to seek actual damages individuals must file an individual lawsuit proving they are a member of the class and individualising the amount of damages.
There are no requirements that attorneys provide clients with a cost estimate of the potential litigation at the outset.
Parties in Brazilian proceedings may make an interim application or motion to obtain remedies from the court at any time, including before trial or substantive hearing of a claim. Remedies are granted before a final decision if the party demonstrates they comply with the requirements to grant interim or injunction reliefs (see 6.1 Circumstances of Injunctive Relief).
A party can apply for early judgment on some or all of the issues in dispute. The application must occur before the beginning of evidence production, when hearings and evidence production typically take part.
Early judgment of the dispute is possible when there is no need or request to produce further evidence or when the defendant is in default (revelia) (see 3.6 Failure to Respond). Besides this rule, early judgment is possible when one or more claims are not controversial.
The court may also dismiss a lawsuit before the beginning of evidence production in certain cases, including lack of jurisdiction or standing, existence of another proceeding between the same parties and with the same claims (litispendência) or if there is already a final decision regarding the matter (coisa julgada).
Dispositive motions in Brazil are typically related to procedural defects by which the lawsuit could be dismissed, as described in 4.2 Early Judgment Applications.
Third parties may request to join a lawsuit as either: (i) assistants if the third party has a legal interest in the outcome of the case (generally the assistant has the same powers and is subject to the same burden of the assisted party); or (ii) amicus curiae to assist the court.
Third parties may also be required to join a lawsuit, if:
The defendant may apply for an order that the plaintiff must post a bond or otherwise provide a security for the defendant’s costs in the proceeding when the plaintiff is domiciled abroad and does not own any real estate in Brazil. Also, the defendant may apply for a similar order in interim application cases, where courts may demand that the plaintiff post a bond or other security in an amount sufficient to cover defendants’ potential losses.
There are no additional costs related to interim applications. However, as per 4.5 Applications for Security for Defendant’s Costs, courts may demand that the plaintiff post a bond or other security in an amount sufficient to cover defendants’ potential losses in connection with an interim application.
Although the Civil Procedure Code provides deadlines for the court to rule, courts may, and often do, exceed these deadlines. The most relevant deadlines are:
There are no rules providing for expedited proceedings but parties may request interim or injunction reliefs, in which urgency is considered as a key factor to grant those measures (see 6.1 Circumstances of Injunctive Relief).
Brazilian procedure is based on the principle that parties may ordinarily rely on their own evidence to substantiate their arguments, not allowing for broad common law discovery procedures.
Parties may prove their claims using any evidence legally accepted in Brazil. This means that parties could use documents of any kind that are available to them, as well as request the court to hear witnesses and personal depositions of counterparties, produce technical evidence made by experts retained by the parties or by experts appointed by the court, and request documents in the possession of the other party and third parties.
Documentary evidence should be produced by the parties with the initial statements and response (see 3.4 Initial Complaint). Other evidence must be determined by the court upon request from the parties or ex officio.
Discovery in evidence production is administered by the court. The court will decide in all relevant aspects, after hearing the parties, such as:
Concerning document production, if one party requests a document that only the other party or a third-party possesses, the court could issue a subpoena to such party to present the document. The request for a document must contain:
The requested party could answer the request within five business days (or, if a third party, within 15 business days). Available objections to not produce certain documents include:
The document could also be redacted to hide confidential information.
All evidence should be analysed by the respective counterparty who is allowed to present comments and counterclaims.
It is possible to request document production from a third party which is not named as plaintiff or defendant (see 5.1 Discovery and Civil Cases).
Other than the requirements set forth in 5.1Discovery and Civil Cases, the Civil Procedure Code expressly provides for three cases where the requested party may not refuse to present a document:
For a description of how evidence is generally developed and admitted into the case records, see 5.1Discovery and Civil Cases and 5.3 Discovery in This Jurisdiction.
Brazil recognises the concept of attorney-client privilege, which is provided for in the Federal Constitution and the Attorney Statute (Law No 8.906/1994). This law provides for protection to attorneys’ offices and places of work, and all its working instruments, including all types of professional communications. This means that all communication with lawyers is protected by privilege, which comprises in-house and external counsels. Privilege does not apply if there is evidence that the document is related to a crime.
The rules that allow a party not to disclose a document are described in 5.1Discovery and Civil Cases and 5.5Legal Privilege.
Injunctive relief may be awarded in circumstances where there is likelihood of the plaintiff’s claims (fumus boni iuris) and risk of irreparable harm if the injunction is not timely granted (periculum in mora) and provided there is no greater and irreparable harm to the other party (periculum reverso). The Brazilian Civil Procedure Code provides for two general types of injunctions: anticipatory and precautionary.
In the first case, the court anticipates partially or totally the effects of the final award, avoiding further damages to the plaintiff in the meantime, such as an order to suspend the effects of an agreement until the final award. In the second case, the decision aims to guarantee that the plaintiff’s claim may be adequately satisfied, such as an order that freezes assets of a debtor or prevents the transfer of an asset under dispute.
Although the Brazilian Civil Procedure Code establishes a ten business-day deadline for courts to decide on interim or injunctive relief, this deadline is not always complied with in practice (see 6.7 Consequences of a Respondent’s Non-compliance). Therefore, it is impossible to predict how quickly injunctive relief can be obtained in the country. In general, judges are sensitive to urgent matters and rule the issue within the applicable deadline, depending on the complexity and urgency of the case. For extremely urgent matters outside regular court hours (during weekends or holidays), there is also an on-call judge available.
Both anticipatory and precautionary injunctive reliefs may be obtained on an ex parte basis (ie, without notice to the respondent). Plaintiff must demonstrate that the matter is so urgent that providing time for the defendant to respond could irrevocably harm the plaintiff’s rights.
The applicant of an injunction relief may be held liable for damages suffered by the respondent if the respondent successfully discharges the injunction. There is no need to prove fault for the applicant to be held liable. A security or bond provided by an applicant for such potential damages is not mandatory under Brazilian Law, but courts could require it taking into account the circumstances of the case. See 4.4 Requirements for Interested Parties to Join a Lawsuit and 4.5 Applications for Security for Defendant’s Costs.
The Brazilian jurisdiction is territorial, therefore injunction reliefs against worldwide assets may be limited. In order to request international co-operation to fulfil the relief, courts may issue rogatory letters. The rules applied to rogatory letters and the efficacy of this measure depends on the existent rules between Brazil and other jurisdictions in which assets are located.
Although due process forbids courts to grant injunctive reliefs against third parties, third parties may still be affected by certain decision. For this reason, third parties may intervene in a lawsuit if an injunction relief affects their assets or other rights. For third party intervention, see 4.4 Requirements for Interested Parties to Join a Lawsuit.
If a respondent fails to comply with the terms of an injunction, civil courts in Brazil may apply fines, retain the defendant’s driver licence and passport as well as call upon police assistance if necessary.
Civil procedure in Brazil is mainly conducted in writing (see 1.1 General Characteristics of the Legal System). As a rule, the arguments of the parties are presented in writing to the court. However, witness statements, experts and parties’ depositions may be taken in an evidence production hearing before the judge.
There are no mandatory case management hearings in Brazilian civil procedure.
Jury trials are not available in Brazilian civil procedure, but only in certain limited criminal cases – for example, murder and other crimes against life.
Oral evidence is the only evidence that can be produced during a hearing in Brazil. In order to organise the hearing, the court schedules a date for the hearing. During the hearing oral evidence is produced, preferably in the following order
In the end, the court may allow counsel for the plaintiff and defendant to provide additional oral arguments.
Expert testimony is permitted in hearings in Brazil. As with all other types of evidence, expert testimony must be authorised by the court if requested by a party or determined by the court ex officio. Expert testimony could comprise the expert appointed by the court as well as expert assistants retained by the parties. In the priority order provided for the Civil Procedure Code as a matter of organisation of the evidence production hearing, expert testimony is the first testimony to be heard.
All hearings and transcripts of the hearings in civil procedures are open to the public, unless the court orders that the lawsuit or the hearing is confidential according to applicable rules (see 1.3 Court Filings and Proceedings).
During evidence production hearings, the judge presides and directs the hearing, asking questions and deposing experts, parties and witnesses.
Generally, courts only rule on procedural and evidence production matters during a hearing. Although the court could issue the final award in the hearing, it commonly issues the final award later in writing.
The timeframe of civil proceedings may vary significantly in Brazil, depending on the court. Corporate law disputes in the city of São Paulo (under the São Paulo business courts) have an average timeframe of one year from initial claim filing to the evidence production stage. The evidence production stage could vary depending on the discovery determined by the court and it may take another year or two until a final decision. For example, expert reports conducted by the court tend to delay the proceeding.
Appeals against certain interlocutory decisions (such as a decision on a preliminary or injunction relief) could have staying effects (see 6.1 Circumstances of Injunctive Relief), which could also delay the proceeding.
If parties settle a lawsuit, they typically request the court to confirm the settlement agreement because the confirmation decision provides the settlement agreement with the same effects of a final award. In confirming a settlement agreement courts assess if: (i) the agreement comprises rights which parties could dispose; and (ii) the agreement was executed in good faith and without undue influence or duress. The court should not interfere on the merits of the issues agreed between the parties.
If parties present a settlement agreement to the court and ask for its confirmation, which will provide the same effects of a final award, the settlement agreement will generally be public and will only remain confidential if the procedure is sealed or if the court exceptionally agrees to seal the settlement agreement itself, which is not common (see 1.3 Court Filings and Proceedings).
Alternatively, parties may jointly ask for the termination of a lawsuit without presenting the terms of the settlement agreement to the court.
A settlement agreement, if executed by parties and two witnesses, could be considered a título executivo extrajudicial, which could be enforced under an enforcement procedure. Additionally, the award that confirms a settlement agreement constitutes a título executivo judicial which has the same effects as a final award and is subject to a streamlined enforcement procedure. These enforcement procedures are slightly different, as the first gives the defendant a larger spectrum of applicable defences and requires summoning the debtor.
Settlement agreements when confirmed by the court by an unappealable decision are as binding to parties as final and unappealable awards. Settlement agreements may be set aside in certain very limited cases by a rescissory action (see 9.1 Awards Available to the Successful Litigant).
There are two kinds of awards available to a successful litigant under Brazilian Civil Procedure Code. If there are certain procedural defects (see 4.2 Early Judgment Applications), the lawsuit will be dismissed without prejudice before evidence production and without analysis of the merits. In this case, and if the procedural defect can be rectified, the plaintiff could file another lawsuit to discuss the same claims and facts. Otherwise, if the merit of the lawsuit is appreciated by the judge, in an early judgment (see 4.2 Early Judgment Applications) or after evidence production, and after all applicable appeals, a successful litigant will have the protection of a final and unappealable award (coisa julgada) which cannot be discussed or modified.
A final and unappealable award could only be modified by a rescissory action (ação rescisória) in exceptional cases, such as if there is corruption in the case or egregious violation of Brazilian rule of law. In either case, a successful litigant will be reimbursed by the costs incurred in the lawsuit (see 11.1 Responsibility for Paying the Costs of Litigation).
Damages may include direct losses (danos emergentes), loss of profits (lucros cessantes) and moral damages (danos morais). Although punitive damages are not expressly provided for in Brazil, case law has developed to interpret that one of the criteria to determine moral damages is to punish the wrongdoing by the condemned party.
A successful party may generally collect interest starting from the date a defendant is summoned until the defendant discharges the obligations set in the final award. Interest may accrue starting from the occurrence of the act that caused damages in tort-based claims.
The successful party could enforce an award issued by a domestic court amicably or by filing an enforcement proceeding before the court. In an enforcement proceeding a plaintiff may, for example, ask for the seizure of the defendant’s assets, ask for a daily fine until satisfaction, demand that a third party perform the action (eg, transfer an asset), ask the court to direct police assistance (eg, in case of an eviction) or request for the award to be replaced by a loss and damages indemnification.
A decision or award issued by a foreign country will only be effective in Brazil after domestication by the Superior Court of Justice.
In order to be domesticated, the foreign award must:
Only federal courts are competent to enforce domesticated foreign awards.
In civil proceedings there is at least one level of appeal, which means that decisions issued by lower courts (interlocutory decisions and final decision) are subject to appeal to the appellate courts. In the appellate court the lawsuit is reviewed, as a rule, by a three-judge panel. In certain cases, a decision issued by the appellate court could be appealed to the STJ and STF. Those superior courts are not considered a third or fourth level of appeal, because they do not review the facts alleged in the lawsuit and are restricted to specific matters pertaining to the legality or constitutionality of the award (see 1.2 Court System).
There are six types of appeals in Brazilian civil procedure, as listed below.
This appeal is directed to the respective appellate court and is applicable against a final decision issued by a lower court. As a rule, the filing of an appeal stays the effects of the appealed decision. The appellate court may rule on all challenged matters, whether legal or factual.
Interlocutory Appeal (Agravo de Instrumento)
Interlocutory appeals are directed to the respective appellate court and are applicable against certain interlocutory decisions issued by a lower court, exhaustively provided for the Civil Procedure Code. As a rule, the filing of an interlocutory appeal does not stay the effects of the appealed decision. The appellate court may rule on all challenged matters, whether legal or factual.
Special Appeal (Recurso Especial) and Extraordinary Appeal (Recurso Extraordinário)
These appeals are directed respectively to STJ and STF and are applicable against decisions from the three-judge panel of an appellate court, in cases described in 1.2 Court System. As a rule, the filing of those appeals does not stay the effects of the appealed decision. STJ and STF may only rule on legally challenged matters but not on factual matters.
Motion for Clarification (Embargos de Declaração)
This motion is directed to the same court that issued the challenged decision. Motion for clarification is applicable with the purpose of clarifying obscurities, eliminating contradictions and remedying omissions. As a rule, the filing of a motion for clarification does not stay the effects of the appealed decision.
The scope of an internal appeal is very limited.
As a rule, parties have the right to return legal and factual issues to a second degree of review (typically an appellate court). Appeals to STJ and STF may only be granted if they comply with the limited scope imposed for these (see 1.2Court System). See also 10.1 Levels of Appeal or Review to a Litigation.
Interlocutory appeals are filed directly before the appellate court and assigned to a reporting judge which is part of a three-judge panel. Appeals are filed before the lower court that must forward the proceeding to the respective court of appeals, where the appeal will be assigned to a reporting judge which is part of a panel.
Considering the limitation of the scope, special and extraordinary appeals are filed before the president or vice-president of the respective appellate court, who determines whether the appeal meets all requirements. The decision concerning this matter issued by the president or vice-president of the Court of Appeals is appealable to the STJ and STF.
Motion for clarifications will be ruled on by the same court that issued the decision.
All appeals must be filed within 15 business days as of the notice of the decision to the party, except for the motion for clarifications which must be filed within five business days.
The appellate court is able to freely re-examine all matters related to parties’ claims, since the claims were brought before the lower court, even if they were not examined. Regarding other appeals, see 10.1 Levels of Appeal or Review to a Litigation and 10.2 Rules Concerning Appeals of Judgments.
Except from the specific requirements applicable to each appeal (see 10.1Levels of Appeal or Review to a Litigation, 10.2Rules Concerning Appeals of Judgments and 10.3 Procedure for Taking an Appeal), courts cannot impose other conditions on granting an appeal.
After receiving an appeal, appellate courts (generally the reporting judge) can assign or withdraw staying effects to the appeals, depending on whether the appeal has automatic staying effect or not (see 10.1 Levels of Appeal or Review to a Litigation). Staying effect is generally granted if there is a likelihood in the claims and if there is danger of damaging the party if the decision is not timely stayed.
After judgment of the appeal, the court may (i) when it comes to a procedural error (error in procedendo, such as lack of due process), cancel the appealed decision and remand the proceeding to the lower court, or (ii) when it comes to an error in the decision (error in judicando, such as a different interpretation of applicable law), replace the original award.
As a general rule, each party shall initially (i) bear their own attorneys’ fees and (ii) advance payment of court costs and court-appointed expert fees.
Brazil is a “loser pays” system and, as such, at the end of the proceeding, the losing party (which may, to some proportion, be both parties) is required to reimburse the prevailing party for the costs of the litigation; this generally only includes reimbursing the prevailing party for direct court fees and fees of court-appointed experts as well as paying to the prevailing parties’ attorneys court-mandated attorneys' fees. The losing party does not reimburse the prevailing parties’ contractual attorneys’ fees or other expenses not mentioned above.
A party may, at the beginning of a proceeding, request exemption for paying such costs. The party that asks for such gratuity should declare their lack of resources, although it is not required to prove this condition. The judge must grant the benefit unless there ais evidence that the party has the resources.
Whoever gave cause to the filing of a lawsuit shall be responsible for the expanses arising from it (the causality principle). All procedural expenses should be reimbursed and the losing party must pay the attorneys' fee of the prevailing party.
Upon the amount anticipated by the party in the procedures should be updated as of the date of disbursement. Interest is awarded on costs only after a final decision is issued and the amount is not duly payed by the losing party.
Brazil is known for having an overloaded judicial system which results in longer terms for resolution of legal proceedings. In the last couple of decades, alternative dispute resolution methods (ADRs) have gained strength in the country and several rules regarding this subject have been updated. In this sense, ADRs could are an important alternative to the court system.
According to our experience, litigation derived from commercial agreements is very often resolved in arbitration proceedings.
Conciliation and mediation are increasingly becoming popular methods in less complex litigation, including consumer and labour issues. According to data provided by the National Council of Justice (Conselho Nacional de Justiça, CNJ), in-court conciliation and mediation helped courts provide better responses to parties and is slowly helping unload the system. In 2019, 3.9 million settlements were reached in conciliation hearings and confirmed by Brazilian courts, which represent an increase of 5.6% when compared to 2016.
ADRs are not mandatory in Brazilian civil procedure unless both parties show an interest in such methods.
Since the 2015 reform of the Civil Procedure Code, mediation and conciliation gained additional importance in ordinary proceedings. Upon receiving the initial complaint, the court must schedule a conciliation or mediation hearing to be held before the defendant presents its response. The hearing can only be dismissed if (i) the dispute does not allow settlement or (ii) the parties expressly agree to dismiss the hearing. Unjustified non-attendance by the parties to such hearing is considered obstruction of justice and is sanctioned with a fine of up to 2% of the value involved in the cause, but parties don’t have an obligation to engage during the hearing.
In-court mediation and conciliation advanced significantly in recent years especially due to the regulation of the matter in the Civil Procedure Code, the enactment of the Mediation Law as well as the enactment of Resolution No 125/2010 of the CNJ. Several courts created centres for in-court conciliation and mediation. Private chambers also provide for centres of mediation and conciliation, although the use of those techniques is not as broad as in-court centres in Brazil.
On the other hand, arbitration is well developed and organised in Brazil, especially in complex corporate litigation. Several international arbitration chambers are held in Brazil, such as the International Chamber of Commerce (ICC) and the American Chamber of Commerce (AMCHAM). There are also national chambers such as Federação das Indústrias do Estado de São Paulo (FIESP)and Câmara de Comércio Brasil-Canadá (CCBC).
Also noteworthy is the chamber from the stock exchange B3 (Câmara de Arbitragem do Mercado, CAM) which is mandatory for corporate litigation involving publicly held companies listed in B3’s higher corporate governance standard segment (Novo Mercado), which must have arbitration clauses in their by-laws. There have been several corporate litigations before CAM and the chamber is becoming ever more common.
Arbitration Law (Law No 9.307) was enacted in Brazil in 1996 and provides general rules regarding arbitration in Brazil. The Civil Procedure Code also contains certain rules regarding arbitration.
An arbitration award in Brazil has the same effects of a final and unappealable decision issued by courts and enjoys the same benefits (see 9.4Enforcement Mechanisms of a Domestic Judgment).
Under Brazilian law the only matters that may not be resolved under arbitration are those relating to so-called unavailable rights (direitos indisponíveis), such as life or freedom.
Arbitration awards could be challenged in Brazil by an annulment action. Parties could seek for annulment if:
As a matter of practice, courts tend to shy from voiding arbitration awards.
For domestic arbitration, see 13.1 Laws Regarding the Conduct of Arbitration. For foreign arbitration, see 9.5 Enforcement of a Judgment from a Foreign Country.
While there are always certain amendments being discussed in Congress, there are no reform proposals or significant amendments under discussion that are at an advanced stage.
In light of the COVID-19 pandemic, courts’ operation and proceedings deadlines were suspended across Brazil for several weeks during the first half of 2020, with the exception of urgent matters. The CNJ also released several resolutions directing the courts to avoid face-to-face service and incentivising the use of videoconferencing platforms in court hearings and other procedural acts.
It is also worth noting Law No 14.010/2020, which provided for certain rules applied to civil and corporate issues as a consequence of the pandemic – for example, the suspension of certain statues of limitations since the enactment of the law until 30 October 2020.