A New Jurisdiction Increases Certainty for Investors
A new Code of Civil Procedure is to be voted in the House of Representatives by March. But will the modern version be more effective for companies?
When it comes to doing business in Brazil, it is necessary to be prepared to deal with a lot of legal procedures. Or at least, you should have someone who would help you understand how the complex Brazilian legislation works. In short, it is required from entrepreneurs preparation and planning to be legal in Brazil, what can demand a lot of time and effort.
Just to give an idea, according to the Tax Planning Brazilian Institute, a company goes through an average of 3500 rules to do business in Brazil, part of them regulated by the Code of Civil Procedure (Código de Processo Civil, commonly referred as to CPC). That is an astonishing amount of rules if compared to other countries like China (398), Russia (290), India (254).
The Code
The Code of Civil Procedure is the law that regulates all civil juridical procedures in Brazil. The version currently applied dates back to 1973, but it has been subjected to many changes since then. These changes always aimed at simplifying the Bill, allowing then more agility to the procedures.
Despite being obsolete, the current version of the Code remains, delaying the business flow and causing many headaches to business owners. Not only the rules are numerous, but they can also be confusing and conflicting. That is the basic reason why a new CPC was written and now awaits the House’s approval.
What changes?
The main changes in the CPC aim at speeding up the civil procedures by decreasing the number of lawsuits and delaying instruments. It will encourage the resolution of conflicts through conciliation, in order to accelerate transactions.
Another point is that the new CPC establishes equal treatment for equal demands in companies’ stocks, family, reparation for damage, consumers, questions about contracts, among other issues.
With this isonomy instrument, companies will have more legal certainty to invest in Brazil, without running the risk of being surprised by isolated decisions from the Justice. Also the measure will avoid that thousands of lawsuits about the same issue happen to be judged in different courts, resulting in different verdicts.
The uniqueness of decisions will stabilize trade relations and guarantee more transparency to the companies’ financial statements. That will represent more fairness to decisions, avoiding people to appeal and consequently will bring more speed to the courts.
A Modern Approach
By modernizing the CPC, a lot of procedures that could only be done in presence will be attended by online systems. That is another change that will save some time to entrepreneurs, time that can be invested on the business, instead of being wasted in long queues at the courts.
Another advantageous point of the new Code of Civil Procedure is its language. The renewed CPC comes written in a much simpler way, which will enable people in general (not only Law professionals) to have a better understanding of its content.
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