A class action or a class suit is a collective lawsuit that originated in the United States. Collective representation exists in the Brazilian civil law legal system and has practices and procedures similar to those found in the U.S. Here you will learn how this form of collective representation works in Brazil.
The history of collective action in Brazil, more commonly known in Portuguese as ação coletiva, has its roots in traditional common law. Brazil imported the idea of class action litigation through research and lobbying efforts of three of the most distinguished Brazilian jurists, José Carlos Barbosa Moreira, Ada Pellegrini Grinover, and Waldemar Mariz Oliveira Júnior.
The system was adopted and modified over a short period of time through the following judicial actions:
- The Public Civil Suit Act of 1985 was the first statute dealing specifically with class action procedure. Its enaction provided suitable proceedings for injunctive class actions, those which seek to require a party to refrain from doing a specific act, as well as damages suffered by the class. It affords general protection of the environment, the consumer and properties and rights of artistic, aesthetic, historic, touristic and landscape value.
- The Brazilian Constitution of 1988 created a non-criminal law class action version of habeas corpus, referred to in Portuguese as mandado de segurança coletivo. The this segment of the constitution specifically protects against the illegality and abuse of power by public officials.
- The 1989 and 1990 statues outline the protection of the disabled, stock market investors, and children.
- The 1990 Consumer Defense Code, known in Portuguese as Código de Defesa do Consumidor, was created. The principal of the code is to defend the consumer in court and provides detailed procedures for class action lawsuits regarding individual damages. The class proceeding of the code is trans-substantive, which means it is applicable to every kind of group right open to class litigation.
Characteristics of Class Action in Brazil
There are specific traits that the Brazilian class action possesses. The defendants in class actions span a wide range of sectors and include the following areas:
- government Entities (most common)
- private Education Institutions
- financial services companies
- health insurance providers
- other various industries
Class actions have been brought against entities in both the private and public sectors to cut down on wrongdoings such as false advertising, environmental damages, product defects and lack of consumer information. The class action in the Brazilian sense is brought by a representative plaintiff in protection of right(s) belonging to a group.
Here are some innovations of the Brazilian class action:
- Settlements are not allowed since the plaintiff or plaintiff representative is not permitted to dispose of the group's rights.
- The amount of attorney's fees that the loser pays the winner is a percent of the amount in controversy which, is normally between 10 – 20%.
- Class decree binds the class members absent only if it is favorable to their interests.
- The Attorney General's office is always notified when a class action is filed and is invited to participate as a supervisor to make sure that adequate representation is provided in the case of absentees' interests.
- The creation of a special bank account mandated by the Public Civil Action Act of 1985 that acts as a repository for damages awarded in class actions.
- The protection of class representatives from the payment responsibility for the defendant's legal fees and expenses in case class action is not successful. Excludes cases of bad-faith litigation.
- The exemption of advanced payment of any court fees and expenses.
The small threat of Class Action in Brazil vs. U.S.
Class action is nothing to be afraid of in the Brazil. The manner in which class action was developed in Brazil prevents large payouts and immense attorney's fees. Class action in Brazil is not as widespread as it is in the U.S. partly because of the general lack of faith in the legal system.
Moreover, it isn't as lucrative for the plaintive or the attorney. Punitive damages are not available in most situations and conservative judges normally award modest amounts. The absence of discovery in court proceedings reduces the economic incentive and ability for the legal profession to produce massive attorney's fees. These two key aspects practically eliminate the entrepreneurial bar. It’s important to remember that in the Brazilian civil law legal system, individual litigation is accessible, affordable, just and predictable. Therefore, class litigation is likewise accessible, affordable, just and predictable.