Brazil is a constitutional state, organised as a federation, and operates under a civil law system. This system is characterised by an inquisitorial approach, where the judge plays a central role in managing the proceedings. The judge has the authority to independently order the collection of evidence. The proceedings are mainly conducted through written submissions, although there are opportunities for oral submissions.

Unlike systems that utilise juries, Brazil relies on a single judge to evaluate all submissions and evidence before delivering a first verdict. In appellate courts, cases are reviewed by a panel, ensuring a level of oversight and consistency in rulings. The Superior Court of Justice (STJ) and the Supreme Federal Court (STF) serve as the pinnacle of the judicial hierarchy, handling appeals on matters of law and constitutional interpretation.

Brazil’s judicial hierarchy begins with the STF, which has ultimate jurisdiction over constitutional matters. Below it is the STJ, which is tasked with ensuring uniform interpretation of federal law by reviewing appellate court decisions. At the appellate level, cases are typically heard by a panel of three judges, while first instance courts generally have a single judge presiding over cases. In the first instance, cases are conducted and adjudicated by a single judge, with all evidence collection exclusively undertaken at this stage.

Within the general court system, there are both federal and state courts. Federal courts handle cases involving the federal government or its entities, such as federal agencies and federal tax. State courts, on the other hand, have jurisdiction over all other matters not specifically assigned to federal courts.

Specialised courts in Brazil include labour, electoral, and military courts. In major cities, courts are often organised by speciality, such as family, commercial, intellectual property, and insolvency, to better address specific types of legal issues.

Judicial proceedings are generally public and open for any individual to access. Since 2019, electronic systems have been widely adopted across most jurisdictions, enabling full online access to case files. However, some exceptions exist, such as cases involving arbitration; the enforcement of arbitral awards; family law matters; and competition and antitrust disputes. Furthermore, parties may petition for confidentiality in specific cases, provided they present valid reasons, although the final decision is at the discretion of the judge.

As a rule, parties must always be represented by an attorney appointed through a power of attorney. Only Brazilian lawyers, registered with the Brazilian Bar Association (OAB), are permitted to act in judicial proceedings in Brazil. In specific proceedings in small claims and labour courts, parties are not required to be represented by an attorney. A corresponding power of attorney must also be included in the case records.

Third-party litigation funding is possible, and it has been gaining acceptance, especially in complex commercial and arbitration cases. However, the practice is still relatively new and lacks specific regulation.

There is no specific regulation in terms of third-party funding. Third-party funding is uncommon, but when it does occur, it is typically in litigation involving negotiable rights (such as property, damages, reimbursement, insurance, and compensation, among others).

Third-party funding is available to both plaintiffs and defendants. However, it is more commonly used by plaintiffs.

As there is no regulatory framework, third-party funding lacks a defined minimum or maximum amount, and funding amounts are determined by each funder’s policies, case value, and anticipated returns.

Litigation expenses encompass several categories. These are as follows.

• Fees for filing claims, costs related to summonses and other communications, and appeal fees.
• Fees for experts, whether appointed by the court or selected by the parties.
• Attorney fees.
• Any additional costs associated with the litigation process.

All these costs may be funded by third parties.

Parties and their counsel are free to negotiate contingency fee arrangements. In addition to the success fees negotiated with their own attorney, there are also recovery costs and attorney fees.

There are no specific time limits by when a party to the litigation should obtain third-party funding.

In Brazil, there is no formal, standardised requirement for pre-action conduct similar to those seen in some other jurisdictions.

The applicable periods for statutes of limitations vary depending on the underlying matter. The statutes of limitations for civil lawsuits are governed by the Civil Code, with limitation periods varying based on the type of claim and the specific legal context. Key limitation periods are as follows.

• General limitation period: the general limitation period for civil claims is 10 years if no specific term applies. This covers many civil obligations.
• Contracts: a five-year limitation period applies to claims involving contractual debts, triggered from the moment the obligation becomes due.
• Torts: claims involving torts (eg, personal injury or property damage) have a limitation period of three years, starting from the date the injury or damage was known to the injured party.
• Consumer rights: under the Consumer Protection Code, claims against suppliers for defective goods or services must be brought within five years from the date the consumer became aware of the defect.
• Employment law: employment-related claims have a shorter limitation period, with claims having to be brought within two years of the employment relationship ending.

The limitation period generally begins when the claimant becomes aware of the facts that give rise to the claim or when the obligation becomes due. Certain events, like fraud or concealment, may toll or pause the limitation period. Courts strictly enforce limitation periods and bar claims filed after the statutory deadline.

Jurisdiction over a defendant is generally based on the defendant’s domicile, the location of the obligation, and the case’s subject matter. State courts handle most civil cases, while federal courts oversee cases involving federal entities or specific federal matters.

Consumer and labour cases allow plaintiffs to file in their own domicile for additional protection. Appellate and higher courts don’t have separate jurisdictional requirements but review cases on appeal or specific legal issues. Defendants can challenge jurisdiction if these requirements aren’t met.

The initial document filed to initiate a lawsuit in Brazil is called an initial complaint (petição inicial). This document must inform the court of where the claim is being filed, detail the plaintiff’s claims, the relevant facts, the legal grounds, the relief requested, supporting evidence, the amount in dispute and provide a precise description of the relief sought.

Amendments to the initial complaint are permitted but are subject to specific rules. Generally, a plaintiff may amend the complaint once before the defendant has been served. After service, amendments require the court’s permission, which is often granted to ensure the case is properly presented, provided the changes do not cause undue prejudice to the defendant.

The court initiates the process of service to the respondent primarily through digital platforms designated by each respective court, with priority given to PJe, Eproc, and Esaj systems. Both public and private entities must register an official email address with the court specifically for receiving official notifications and service of process. This requirement is intended to facilitate prompt and reliable electronic service.

If the respondent does not confirm receipt within three business days, the court may then proceed with alternative service methods. These methods are:

• standard postal mail;
• a summons issued by the court clerk;
• personal service by a court clerk when the respondent is present at the courthouse; or
• notice through public announcement.

The claimant is required to explain any issues in securing electronic acknowledgement, with penalties, including fines, potentially imposed for delays without valid justification.

For parties residing outside the court’s jurisdiction and without a registered email address, the initial service attempt is made by post. In cases where this fails, the court issues a letter rogatory to be processed by the court where the respondent resides. International respondents are served exclusively through the issuance of letters rogatory.

Once served, the respondent has 15 business days to submit a defence. This defence should comprehensively cover all potential procedural and substantive arguments, including any factual and legal claims, and must include all supporting documentation available at that time.

Any counterclaims the respondent wishes to raise must be included within this initial defence. Upon receiving the defence, the court notifies the claimant to file a rebuttal and address any counterclaims as necessary.

If a defendant does not respond to a lawsuit within the specified timeframe (usually 15 business days after being served), the court may declare a default judgment. This default judgment applies except:

• when the claim involves non-transferable rights;
• if any co-defendant among multiple respondents files a response;
• if the allegations are implausible or contradicted by existing evidence; or
• if the initial complaint lacks a fundamental document needed to substantiate the claims.

Despite a default judgment, the defendant retains the right to participate in subsequent legal proceedings, though without altering or invalidating the previous procedural stages.

Typically, individuals are not authorised to initiate legal actions on behalf of others, except in instances where collective actions are legally permitted. Such instances include public civil actions, popular actions and collective writs of mandamus. Entities like public prosecutors, public defenders, governmental bodies, and specific associations and unions possess standing to initiate public civil actions, addressing issues like environmental conservation, consumer rights, labour rights and other matters of collective interest.

Individual citizens may pursue popular actions aiming to nullify acts perceived as harmful to public assets. The term “public assets” is broadly defined and covers economic, historical, aesthetic, touristic, and environmental resources of public significance.

The system for collective litigation employs a unique framework where the collective nature of the action and its outcome influence the binding scope of the resulting judgment. Individuals involved in related lawsuits may choose to proceed alongside a collective action or request a suspension of their individual proceedings to benefit from the outcome of the collective judgment.

Although Brazilian lawyers are not mandated to provide cost estimates for litigation, the Ethical Code of the OBA requires them to convey the potential risks and consequences of pursuing legal action to their clients transparently.

In Brazilian civil litigation there is no formal pre-hearing motion practice. Parties may file petitions at any point to emphasise aspects of their defence that could merit an early judicial ruling. It is also possible to make an interim application or motion before the trial or substantive hearing of a claim.

These interim measures are not limited to case management. They can also include substantive remedies to protect rights or interests before the final judgment. These interim applications require the requesting party to demonstrate prima facie evidence of their claim and urgency or potential for irreparable harm if the relief is not granted.

Early judgment is permitted in cases where a pre-trial phase is not required. In these situations, the judge may dismiss the claim outright, even before summoning the defendant, if the claim contradicts any of the following.

• A summary decision issued by the STF or the STJ.
• A ruling rendered by the STF or the STJ in repetitive appeals.
• A precedent established through the resolution of an incident involving repetitive demands or assumption of competence.
• A judicial interpretation regarding local legislation.

Additionally, the judge may reject the claim if it is evident from the outset that the statute of limitations has expired. In the event of this type of dismissal, the plaintiff is entitled to appeal the decision, after which the defendant will be summoned to present their defence before the appellate court.

Interim applications or motions are permitted before the trial or substantive hearing of a claim, and they may extend beyond case management to obtain remedies that protect parties’ rights. Common examples include the following.

• Preliminary injunctions: to prevent harm or secure assets, such as freezing bank accounts or halting certain actions.
• Urgent relief: for cases with immediate risk of irreparable harm, the court can order measures like protective orders or provisional custody.
• Evidence reservation: parties can request the preservation or early production of evidence if there’s a risk of loss or alteration.

For further information, see 4.1 Interim Applications/Motions.

Third parties with a legal or financial interest may join a lawsuit under joinder procedures. This can usually occur through the following.

• Voluntary joinder: a third party requests to join with court approval.
• Compulsory joinder: the court or an existing party requests the third party’s participation if essential to the case.
• Assistance: a third party joins to support one side if their rights may be impacted by the case’s outcome.

Furthermore, unions, entities, associations, representative class organisations, and even individuals may participate in a lawsuit as amicus curiae in matters of significant importance or substantial social impact. The decision to admit an amicus curiae is at the discretion of the judge, and this type of decision is not subject to appeal.

As a general rule, a defendant cannot require a claimant to provide a security deposit for the former’s legal costs. This requirement only applies in certain specific actions, such as an action to annul a judgment (ação rescisória) where a claimant is obligated to deposit an initial amount with the court.

Additionally, they must provide a bond sufficient to cover potential court costs and attorney fees that may be awarded by the court in cases where claimants are foreign nationals or Brazilian residents living abroad who do not own real estate within Brazil.

Interim applications or motions do not typically incur any fees.

There is no set timeframe within which courts are required to adjudicate a case. While some matters may be resolved within a few days, many proceedings last months. The duration varies significantly depending on the specific court handling the case, the complexity of the issues involved, and the nature of the claims at hand.

To request urgency, the filing party must demonstrate prima facie evidence and immediate risk of harm, allowing the court to prioritise and issue a quicker decision.

Brazilian civil procedure has a limited form of discovery known as evidence production, which is more restrictive than in common law systems. Discovery is primarily court-administered, with judges playing an active role in overseeing and approving evidence requests to ensure relevance and necessity.

Witness testimony occurs during a hearing supervised by a judge, after the submission of initial written arguments by the parties. Courts may require the opposing party to produce documents, but only if a well-founded request is made, specifying the desired information and demonstrating its relevance. It is also permissible to present technical evidence, such as expert reports or opinions.

Parties are not required to disclose all evidence in their possession, particularly if such evidence would undermine their own claims or interests. However, the court, either on its own initiative or upon a party’s request, may order the production of specific documents or items.

To make such a request, the requesting party must clearly identify the evidence sought, explain its intended purpose, and demonstrate its relevance to the dispute. Additionally, the requesting party must justify their belief that the evidence exists and is in the possession of the opposing party.

The party from whom the evidence is requested has the opportunity to respond to such demands, and the judge will evaluate the request and determine whether the document or item must be produced. Failure to comply with a court order for evidence production may lead to the judge accepting the requesting party’s assertions as true.

If the evidence is held by a third party, the judge will arrange for the third party to be notified and will assess the necessity of the evidence’s production.

It is possible to obtain evidence from a third party not directly involved as a plaintiff or defendant in a case. The court may order a third party to produce documents or provide evidence if it is considered necessary for resolving the dispute.

Conditions for Third-Party Discovery

Court authorisation required

A party to the lawsuit must request the judge’s authorisation to obtain evidence from a third party. The request must specify the documents or information sought and demonstrate their relevance and necessity to the case.

Limited scope

Unlike broader discovery practices in common law systems, Brazilian courts require that the request be specific and directly related to the matters in dispute. This avoids general or overly broad demands.

Third-party rights

The rights of third parties are protected during this process. A third party can object to a request for evidence on grounds such as privacy, confidentiality, or irrelevance. The judge will weigh these concerns against the need for the evidence in the case.

Examples of Third-Party Discovery

Financial records

Courts can order banks or financial institutions to provide records relevant to a dispute.

Business records

In cases involving contractual or business disputes, third-party companies may be required to produce documents or contracts relevant to the matter.

Expert evidence

Third parties, such as technical experts or service providers, may be called upon to provide reports or clarifications necessary to understand complex aspects of a case.

In Brazilian civil procedure, the concept of discovery is more limited and formalised compared to common law jurisdictions. The process is highly regulated and overseen by the court, with parties bearing the primary responsibility for producing evidence that supports their claims or defences.

Discovery is narrower, and extensive pre-trial evidence gathering, like depositions, is not typical. Parties must instead submit relevant evidence along with their initial pleadings, such as contracts or documents supporting their arguments. Judges play an active role in the evidence process, with the authority to order the production of specific documents or deny requests that are deemed irrelevant. This ensures the focus remains on evidence directly related to the dispute.

Parties can request specific documents from the opposing party, but these requests must clearly identify the documents and demonstrate their relevance to the case. The court decides whether to grant these requests.

Judges may order parties or third parties to produce documents critical to resolving the case, but this is generally limited to essential evidence. Parties are expected to disclose necessary evidence and act in good faith. Non-compliance can result in sanctions or adverse inferences. Certain documents, such as attorney-client communications or trade secrets, may be protected from disclosure if they are not directly relevant to the dispute.

The traditional discovery mechanisms are not available, so evidence is generally developed and admitted through a court-controlled process called evidence production, with the judge playing a central role in managing evidence to ensure that only relevant and necessary information is included.

Evidence gathering involves several steps. Parties may present documents or request specific documents from the opposing side or third parties, but must justify their relevance, and judges review and approve these requests before ordering production.

Witness testimony is identified in advance and typically taken during a court hearing under the judge’s supervision, allowing both parties to question witnesses while ensuring relevance.

For complex cases, the court may appoint an independent expert to provide technical assessments, and parties can nominate their own experts to comment on these findings. In some cases, the judge may also order a judicial inspection of locations or items directly related to the dispute.

This structured process limits excessive or irrelevant evidence gathering, with the judge admitting only what is essential to resolving the case fairly.

In Brazil, attorney-client privilege applies to all communications between attorneys and their clients, whether verbal or written, and attorneys are required by law to maintain this confidentiality, regardless of the client’s nationality.

Please see 5.4 Alternatives to Discovery Mechanisms.

Brazilian law allows for injunctive relief when the petitioner can demonstrate a strong likelihood of success and a risk of irreparable harm should the relief not be granted. In urgent cases, relief may be requested without notifying the opposing party, although such orders are reserved for situations where delays could nullify the relief’s efficacy or worsen the harm.

To qualify for injunctive relief in Brazil, an applicant must convince the court that, based on the evidence and legal arguments presented, a favourable ruling is probable and must show the potential for harm that cannot be easily compensated or remedied, or that failing to grant the relief would make any final judgment ineffective.

In urgent cases, injunctive relief in Brazil can be obtained within hours, with on-call judges available after hours for exceptionally pressing matters. The applicant must show prima facie evidence and immediate risk of harm to secure a swift, provisional decision.

While ex parte injunctions are permissible, they are reserved for exceptional cases. The applicant must present compelling evidence that immediate relief is necessary to prevent irreparable harm or that any delay would render the relief ineffective.

If an applicant obtains an injunction that is later discharged and found to have caused damage to the respondent, the applicant may be held liable for that damage. The respondent can claim compensation if the court determines that the injunction was improperly granted or if the applicant acted without sufficient grounds.

Injunctive relief is generally limited to assets within the country. Brazilian courts typically lack jurisdiction to directly affect or seize a respondent’s assets located abroad. However, if injunctive relief against worldwide assets is essential, Brazilian courts may support the applicant in seeking co-operation from foreign jurisdictions through international judicial co-operation or letters rogatory.

While injunctive orders do not directly bind third parties, they are nevertheless obligated to comply with court directives. These orders do not typically impose direct liability or obligations on third parties but rather require their co-operation to implement the injunction, as with banks freezing accounts or telecom companies restricting access in compliance with the court’s order.

Non-compliance with an injunction can result in fines and other court-imposed measures to enforce adherence to its terms.

Brazilian civil procedure is primarily written, with oral submissions being admitted as an exception. The process begins with the presentation of the initial petition, which will be assessed by the judge. If there is regularity and the legal and procedural requirements have been met, the judge will order the defendant to be summoned to present a defence in accordance with the deadlines set for each type of procedure.

Once the defence has been presented, the plaintiff will be summoned to speak out and then the judge must resolve the case, analysing all the preliminary issues and possible causes for the termination of the case, as well as fixing the controversial points of the case on which the parties must produce the evidence, if and as granted by the judge.

The judge is the director of the process and the recipient of the evidence in a typically inquisitorial process. Evidence can be documentary, oral or technical. Documentary evidence consists of written documents, photographs, audio and video recordings, among others. Oral evidence may be statements and hearings of the parties, which will always be collected by the judge in a specific hearing for that purpose. It is also possible to produce expert evidence, carried out by a court-appointed expert.

For complimentary information, see 1.1 General Characteristics of the Legal System, 4.1 Interim Applications/Motions, 5.1 Discovery and Civil Casesand 5.4 Alternatives to Discovery Mechanismsfor details on trial proceedings.

Oral evidence is widely accepted in Brazilian civil procedure. There are essentially two types of oral testimony: witness testimony and the personal testimony of the parties. Each party may present up to ten witnesses. Ten witnesses may be presented in complex cases. Additionally, there is the possibility of questioning an expert during a hearing.

Oral evidence is gathered during a hearing specifically scheduled by the judge for this purpose. In appellate courts, during the hearing of appeals, it is also possible for the parties to present oral arguments, with each party typically being allotted 15 minutes to summarise their case before the court during the hearing. However, the examination of witnesses or experts is not permitted at the appellate stage before the court. The production of evidence must always and exclusively occur in the first instance.

Civil and commercial cases are not subject to jury trials in the Brazilian system.

All evidence must be lawful, as evidence obtained through illegal means is not admissible in Brazilian civil procedure. The invalidity of such evidence can result in the annulment of the entire proceedings.

The admission of evidence at trial is governed by important principles outlined in the Code of Civil Procedure. The key rules include:

• relevance and necessity;
• legality of evidence;
• burden of proof (generally, the burden of proof lies with the party asserting a fact. Plaintiffs must prove their claims, while defendants carry the burden of proving their defences. In some cases, the burden may shift if one party has better access to specific information);
• a judge’s role in evidence collection (Brazilian judges play an active role in managing evidence, including ordering additional evidence or requesting specific documents if necessary for a fair judgment;
• document authentication and witness examination; and
• expert evidence, for technical or specialised issues.

Expert testimony is permissible. Experts are appointed by the court, either independently or at the request of a party. Their role is to provide impartial analysis and insights into technical questions posed by the court or parties. Experts compile their findings into a detailed report, which may include recommendations or explanations as requested.

Hearings are generally open to the public, following the principle of transparency in judicial proceedings. This openness is meant to ensure that the judicial process is accessible and that justice is administered in a way that is visible to society.

However, there are some exceptions to this rule when privacy, confidentiality, or security concerns outweigh the need for transparency. Judges may order a hearing to be conducted in private in certain situations.

This might happen if the nature of the case involves sensitive matters, such as family law disputes, cases involving minors, issues related to personal privacy, trade secrets, or matters of national security. In these cases, the judge has the discretion to limit access to the hearing to only the parties, their legal representatives, and other individuals deemed necessary.

The Brazilian judge’s active role in hearings reflects the traditional emphasis of civil law on judicial management and fact-finding, aiming to ensure that decisions are based on a comprehensive understanding of the issues before the court.

Judges are responsible for managing the procedural aspects of a hearing. They decide on the admissibility of evidence, rule on objections, and may even order the production of additional evidence if it is deemed necessary for the resolution of the case. This allows a judge to maintain control over the direction and pace of the proceedings.

During hearings, judges may directly question the parties, witnesses, and experts. They may also clarify facts that are critical to understanding the case. This is particularly common when technical or complex issues are involved, as the judge seeks to ensure that all relevant evidence is properly addressed.

The average total duration of a commercial dispute, including appeals, can range from six to eight years. This period includes the time required for review in the first instance, the filing of appeals, and the final decision in the second instance or, potentially, in higher courts (STJ and STF).

In the first instance, on average, a case takes about two to three years to reach a judgment. This timeframe can vary depending on the type of case and the court’s workload. More complex commercial disputes or those that involve technical evidence tend to take longer.

In the second instance, when an appeal is filed, the average time for a decision is about one and a half to two years. In some regions, depending on the backlog of appellate courts, this period may be longer.

In cases that proceed to the higher federal courts, such as the STJ and the STF, it is not uncommon for the matter to remain pending for several years before a final decision is rendered.

Parties can reach a settlement at any stage of the proceedings and submit it to the court, which then issues a formal decision to close the case based on the agreement. The settlements are generally left to the discretion of the parties involved, and the court’s role is limited to formalising the agreement and closing the case.

A lawsuit settlement may remain confidential, but with certain limitations depending on the nature of the case and the judge’s discretion. If the parties reach an out-of-court settlement before any lawsuit is filed, they can include a confidentiality clause to keep the terms of the agreement private. In these cases, the settlement remains confidential between the parties, unless there is a need for judicial enforcement.

When parties reach a settlement during the course of a lawsuit and submit it for judicial approval, they can request that the court keep the terms of the agreement confidential. The judge has discretion to grant or deny such a request based on the circumstances of the case. If the court agrees to the parties’ request for confidentiality, the case records, including the settlement terms, may be sealed. This means that the details of the settlement would not be accessible to the public. However, sealed records are generally an exception and not the norm, as transparency is a fundamental principle of the Brazilian judicial system.

Settlement agreements can be enforced either judicially or extrajudicially, depending on their formalisation. When a settlement is approved by a court during an ongoing lawsuit, it has the same effect as a judgment. If one party fails to comply with its terms, the other party can request enforcement directly through the court, without the need for a new lawsuit.

Extrajudicial settlements, reached out of court, can also be enforced if they are properly formalised in writing and signed by both parties. To enforce these agreements, the aggrieved party must initiate an enforcement action, allowing the court to compel compliance through measures like asset seizure or bank account freezing.

Court-approved settlements generally face fewer challenges during enforcement, while extrajudicial agreements require specific legal criteria to be met to be enforceable.

Setting aside a settlement agreement is possible but generally challenging. Courts prioritise the stability and finality of settlements, especially those approved during judicial proceedings. However, there are specific circumstances under which a settlement agreement can be invalidated or rescinded.

Grounds for annulment include fraud, coercion, significant mistakes, illegality, or the incapacity of a party, such as minors. For court-approved settlements, a rescission action must be filed within two years, and the burden of proof is on the party seeking annulment. If annulled, the parties are restored to their original positions, and the dispute may resume.

A successful litigant can receive various forms of awards depending on the nature of the dispute. Common remedies include monetary damages, such as compensatory damages to cover actual losses and, in certain cases, moral damages for non-material harm like emotional distress.

Specific performance is another key remedy, where the court orders a party to fulfil specific obligations, like delivering goods or performing contractual duties, especially when monetary compensation is insufficient. Courts can also issue injunctive relief, either as preliminary measures to maintain the status quo or as permanent orders to prevent a party from certain actions or to compel specific behaviour after a full trial.

Declaratory relief allows courts to clarify the rights and duties of the parties, providing legal certainty in matters like contract interpretation or property rights without necessarily awarding damages. Additionally, courts can order the rescission of contracts or annulment of legal acts when agreements are found to be void due to fraud, mistake, or breach.

Finally, the winning party may recover court costs and legal fees under Brazil’s “loser pays” principle, where the losing party must cover the expenses of litigation. These awards are designed to ensure that the successful party is appropriately compensated and that justice is served based on the specifics of the case.

The legal framework for damages is centred on compensatory damages, which aim to fully restore the injured party by covering actual losses. These damages include material damages, such as lost profits, repair costs, or medical expenses, and moral damages, which address non-material harm like emotional distress or damage to reputation. For moral damages, the assessment is more subjective, and the courts determine the compensation based on the severity of the harm.

Punitive damages are not recognised in Brazilian law and are not typically awarded. Brazilian law follows the principle of full reparation, and there are no fixed caps on compensatory or moral damages, but judges use their discretion to ensure fair and proportional awards, preventing unjust enrichment, especially in the case of moral damages.

Pre-judgment interest accrues based on the nature of the obligation. For contractual liability, interest begins to accrue from the date the losing party is served with the lawsuit. In cases of non-contractual liability, such as torts, interest accrues from the date of the damaging event. Interest is also subject to inflation adjustments to preserve the real value of the awarded amount.

Post-judgment interest starts accruing from the date of the judgment until the final payment is made, and it is also adjusted for inflation to maintain its value. There are no statutory caps on the total amount of pre- or post-judgment interest, ensuring that the successful party is compensated fairly for any delays in receiving payment.

The enforcement of a domestic judgment is primarily carried out through a cumprimento de sentença procedure, which the prevailing party can initiate once the judgment is final and unappealable. This action is filed in the same court that issued the judgment and is designed to compel the losing party to comply with the court’s decision.

For monetary judgments, the court can order the seizure of the debtor’s assets, such as freezing bank accounts, seizing property, or garnishing wages, and may impose fines or interest for delayed payment. For non-monetary judgments, which require specific actions like delivering goods or performing an act, the court can enforce compliance through daily fines to encourage adherence to the judgment.

Enforcing a foreign judgment involves a homologação process before the STJ. The party seeking enforcement must file a petition with the STJ, including a certified copy of the foreign judgment, a Portuguese translation, and proof that the judgment is final in the issuing country.

The STJ reviews whether the foreign judgment meets criteria such as the competence of the foreign court and adherence to due process. The respondent can present defences, but the STJ does not re-examine the case’s merits. If the STJ recognises the judgment, it can then be enforced as a domestic judgment through a separate action in Brazilian lower courts, using standard enforcement measures.

The Brazilian legal system provides multiple levels of appeals and review mechanisms to ensure the fairness and consistency of judicial decisions.

After a trial court issues a final judgment, a party may file an appeal (apelação). This appeal is used to challenge the trial court’s final decision, whether it grants or denies the relief sought by the claimant. It allows for a comprehensive review of both the facts and the legal arguments presented in the case. The appeal is directed to a second instance court that reassesses the decision made by the lower court, potentially altering or upholding the outcome.

Separately, there is the interlocutory appeal (agravo de instrumento), which is used to challenge interim decisions made by the trial court during the course of the proceedings but before a final judgment is reached. Appeals, whether from final judgments or interlocutory decisions, are typically reviewed by a panel of judges in a second instance court, but in certain cases, a reporting judge can decide individually, with the option for the losing party to seek a review by the full panel.

Higher courts like the STJ and the STF handle appeals on legal grounds through recurso especial and recurso extraordinário, respectively, focusing on issues of federal law or constitutional interpretation without re-examining the facts of the case.

In Brazil, any party whose claim is denied may file an ordinary appeal with the state or federal courts of appeals to seek review of both factual and legal aspects of a lower court’s decision. In cases raising substantial legal or constitutional issues, two specific forms of appeal are available: the special appeal (recurso especial) to the STJ for matters involving federal law, and the extraordinary appeal (recurso extraordinário) to the STF for constitutional questions.

These appeals are only permissible if specific criteria are met, including authorisation from the presiding judge of the Court of Appeals, and for STF appeals, a showing of “general repercussion” indicating the constitutional issue’s broader societal significance. This structured approach confines higher court review to cases with far-reaching legal or public impact.

The party wishing to appeal must pay the necessary court fees and file the appeal within the designated period, generally 15 working days after notification of the decision through legal representatives. These timeframes are strictly enforced, with the countdown beginning upon notification, and missing a deadline typically results in forfeiture of the right to appeal.

Appellate courts primarily conduct a review rather than a re-hearing of first instance decisions. This review focuses on legal and procedural aspects of the original decision, assessing whether there were errors in the application of law or significant procedural violations. In ordinary appeals, courts may review both legal and factual matters, including evidence presented at the first instance. However, no new evidence is usually admitted unless exceptional circumstances justify it.

Courts cannot impose conditions on granting an appeal. Once the appellant meets the procedural requirements, such as filing within the designated timeframe and paying court fees, the appeal must be admitted for consideration.

The appellate court, upon hearing an appeal, may:

• confirm the first instance decision, maintaining the original judgment;
• overturn it, in whole or in part, issuing a new decision; or
• set it aside, ordering a retrial at the first instance if significant procedural issues are identified.

The parties must prepay litigation costs, including those for actions ordered by the judge. Costs for court-appointed experts are shared if evaluations are ordered ex officio or requested by both parties. The losing party typically reimburses the prevailing party for advance-paid court fees, expert fees, and witness expenses, but contractual attorney fees are generally not recoverable.

Additionally, the judge awards court-mandated attorneys’ fees (10–20% of the judgment) to the winning attorney, which are distinct from client fees and belong to the attorney.

Courts award costs primarily based on the case outcome, with the losing party typically covering the winning party’s expenses. Additional factors include the economic benefit gained or equitable discretion in difficult to quantify cases, the case’s complexity, the parties’ conduct during litigation, and, for court-awarded attorneys’ fees 10–20% of the judgment. This approach ensures that cost awards are fair, reflective of case specifics, and discourage bad faith litigation.

Litigation costs subject to reimbursement are adjusted for inflation from the date they were incurred up to the reimbursement date, preserving their real value. If the losing party delays reimbursement beyond the specified deadline, default interest is also applied in addition to the inflation adjustment.

Alternative dispute resolution (ADR) methods, especially mediation and arbitration, are increasingly encouraged as efficient and effective alternatives to traditional litigation in Brazil.

Mediation is one of the most popular ADR methods, particularly for family law, consumer disputes, and business conflicts. It’s often conducted within judicial or private settings, where a neutral mediator facilitates negotiations between parties to help them reach a mutually agreeable solution.

Arbitration is also widely used, especially in commercial and contractual disputes, and allows parties to appoint an arbitrator who issues a binding decision.

The Brazilian legal system formally supports ADR through Law No 9.307/1996 (the “Brazilian Arbitration Law”) and the Civil Procedure Code, which emphasises the use of ADR in resolving civil and commercial disputes. Arbitration can be made compulsory if both parties have agreed to an arbitration clause in their contract, making it legally binding and precluding traditional court proceedings for that dispute.

Other methods like conciliation are encouraged at preliminary stages of litigation. ADR has grown in popularity due to its confidentiality, flexibility, and the potential to provide quicker and more customised solutions than the traditional court system.

Institutions offering and promoting ADR are generally well organised and continue to gain prominence in Brazil. Organisations like the Brazilian Arbitration Committee (CBAr) and Chambers of Mediation and Arbitration are reputable, providing structured ADR services with trained mediators and arbitrators, standardised procedures, and international affiliations. Many chambers, such as the Arbitration and Mediation Centre of the Brazil-Canada Chamber of Commerce (CAM-CCBC), the Chamber of Conciliation, Mediation, and Arbitration of São Paulo (CIESP/FIESP), the Centre of Commercial Mediation and Arbitration – CAMARB, and the Stock Exchange Arbitration Centre – CAM B3 have developed detailed rules and guidelines aligning with best practices in ADR.

Additionally, the International Court of Arbitration of the International Chamber of Commerce (ICA-ICC) has opened a branch in São Paulo to support the expanding commercial arbitration market in Brazil.

These organisations have also expanded services across the country, offering ADR for a range of cases from commercial and contractual disputes to family and consumer matters. Public awareness and confidence in ADR are rising due to the strong institutional support and effective implementation of ADR practices.

Arbitration is governed by the Brazilian Arbitration Law, which outlines the procedures for arbitration and the recognition and enforcement of arbitral awards. The Brazilian Arbitration Law legitimises arbitration as a binding method for resolving civil and commercial disputes, provided both parties have agreed to it, usually through an arbitration clause in their contract.

The Brazilian Arbitration Law grants parties significant autonomy in selecting arbitrators, procedural rules, and applicable laws, while ensuring fairness and impartiality in the proceedings. Brazilian courts generally respect the finality of arbitral awards and avoid intervening in the arbitration process. Domestic awards are directly enforceable in Brazilian courts without special procedures.

For international awards, as Brazil is a signatory to the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, enforcement is facilitated through a confirmation (homologation) process by the STJ, which verifies compliance with Brazilian public policy standards. This approach supports the principle of arbitral autonomy and minimises interference.

According to the Brazilian Arbitration Law, only disputes involving freely disposable rights (those rights over which parties have legal control and may freely negotiate) are arbitrable. As a result, matters that involve public policy issues, criminal law, family law (such as divorce, child custody), or labour disputes involving employees (with some exceptions for high-level executives) cannot be settled through arbitration.

Additionally, some matters related to consumer rights and certain administrative issues may also be restricted, particularly where there is a significant public interest involved.

Challenging an arbitral award in court is limited and permissible only under specific circumstances, as arbitral awards are considered final and binding. The Brazilian Arbitration Law allows parties to request the annulment of an arbitral award in court if there are procedural or substantive issues that violate the legal framework or public policy. A challenge is allowed if:

• the arbitration agreement is found to be invalid or non-binding under Brazilian law;
• if one party was not given proper notice of the arbitration proceedings or was unable to present their case, thereby violating due process rights;

• the arbitrators ruled on matters outside the scope of the arbitration agreement, known as beyond the parties’ requests (ultra petita);
• the arbitrators acted with bias, demonstrated a conflict of interest, or engaged in misconduct during the arbitration; or
• the award conflicts with fundamental principles of Brazilian public policy, which can encompass issues of legality, morality, or state sovereignty.

The annulment action must be filed within 90 days of the award’s issuance. Brazilian courts emphasise minimal intervention in arbitration, so these grounds are narrowly applied, focusing on upholding the integrity and autonomy of the arbitration process.

The enforcement of domestic and foreign arbitration awards involves distinct procedures under the Brazilian Arbitration Law and international conventions like the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards.

Domestic awards are enforceable in Brazilian courts similarly to court judgments, with no special formalities. If the losing party does not comply voluntarily, the prevailing party can file an enforcement action in a state court. The court will then enforce the award as it would any judicial decision, treating it as legally binding and final without re-examining the merits.

For foreign arbitration awards, Brazil requires a recognition process known as homologation by the STJ. The party seeking enforcement submits a request to the STJ, which reviews the award to ensure it aligns with Brazilian public policy, procedural fairness, and due process standards.

This recognition is necessary to give the award the same legal force as a domestic judgment. Once the STJ grants recognition, the foreign award can be enforced in Brazil like a domestic judgment. This two-step process, recognition by the STJ followed by enforcement in a lower court, ensures compliance with both international standards and Brazilian legal principles.

There are multiple proposals and reforms aimed at enhancing and modernising dispute resolution processes. These are as follows.

• Law No 14.711/2023 allows for the extrajudicial enforcement of mortgage-backed credits, enabling creditors to enforce these credits outside the traditional court system. This reform is expected to streamline debt recovery and relieve court caseloads by offering a quicker alternative for creditors to secure repayment.
• Bill No 3.293/2021 proposes updates to the Brazilian Arbitration Law, introducing limits on the number of cases in which an arbitrator may participate, guidelines on the duty of disclosure, and requirements for increased transparency in arbitration by publicising information about arbitral proceedings. These measures seek to improve the integrity and accountability of arbitration in Brazil, though this bill is still under legislative consideration.
• Bill No 6.204/2019 focuses on reducing court involvement in enforcement proceedings, aiming to simplify and expedite the enforcement process. This proposal underscores a broader shift towards minimising judicial intervention and promoting efficiency in dispute resolution.

These reforms and proposals indicate a strong legislative trend towards optimising both arbitration and enforcement proceedings, though the timing of implementation for pending bills depends on legislative approval processes.

The primary area of growth for commercial disputes in Brazil appears to be infrastructure and construction. This surge is fuelled by large-scale projects, public-private partnerships, and substantial investments in sectors such as energy, transport, mining, and urban development.

These high-stakes projects often lead to conflicts related to contract execution, delays, cost overruns, and regulatory issues, making infrastructure a focal point for commercial dispute growth. Additionally, corporate and M&A disputes are increasing, especially as companies navigate complex transactions, shareholder agreements, and restructuring processes.