BRAZIL Law and Practice Contributed by: Eduardo Perazza, Glaucia Coelho, Débora Chaves Martines Fernandes and Agnes Domingues, Machado Meyer
used for straightforward claims involving undisputed payment obligations, documented contract breaches or matters following binding precedent. 7. Mass Claims and Class Actions 7.1 Procedural Mechanisms The main mechanisms are the following. • Public civil action – the most widely used collec- tive mechanism in Brazil. It covers a broad range of public interest matters, including environmen- tal protection, consumer rights, cultural heritage, urban planning and antitrust violations. • Citizen lawsuit – a constitutional mechanism allowing any Brazilian citizen to challenge govern- ment acts that harm public assets, administrative morality, the environment or cultural heritage. No legal representation is required, and the plaintiff is exempt from court costs unless acting in bad faith. • Collective writ of mandamus – filed by political parties, unions or professional associations to protect collective rights against unlawful acts by public authorities. It provides a faster remedy than ordinary collective actions. 7.2 Standing Requirements Brazilian class actions follow a representative model: affected individuals do not file or join the action them- selves. Instead, authorised entities act on behalf of all class members. Standing is limited to: • the Public Prosecutor’s office; • the Public Defender’s office; • public entities at the federal, state and municipal levels; • civil associations in existence for at least one year and with purposes directly related to the claim (the one-year requirement may be waived in cases of clear social interest); • public regulatory agencies and foundations (eg, consumer protection agencies); and • trade unions and professional associations (eg, labour unions representing workers in a specific industry, bar associations).
For popular actions, any Brazilian citizen has individ- ual standing to challenge unlawful government acts that harm public assets. 7.3 Relief Brazilian collective actions allow for broad relief, including injunctive orders to stop unlawful conduct, monetary compensation or restitution, environmental remediation and declaratory relief (such as invalidation of abusive contractual clauses). Damages calculation depends on the type of collec- tive right involved: • diffuse rights (indeterminate victims) – compensa- tion is directed to public via a collective fund; • collective rights stricto sensu (defined but non identifiable group) – damages follow the same col- lective fund approach; and • homogeneous individual rights (identifiable indi- viduals with common claims) – the collective judgment establishes liability and each individual later pursues a simplified proceeding to prove and recover their specific loss (the comparable tool is the American Class Action for Damages). Brazil follows the principle of full compensation, cov- ering actual losses and lost profits, and allows moral damages assessed on proportionality grounds. 7.4 Class Actions, Mass Claims and Arbitration Collective actions seeking to protect diffuse or col- lective rights are generally not compatible with arbi- tration in Brazil. The fundamental reason lies in the nature of the rights involved: arbitration requires that parties have the power to freely dispose of the rights in dispute, whereas diffuse rights belong to an inde- terminate group of people and cannot be waived or transacted by any individual or entity. Consumer claims involving large numbers of indi- viduals with similar grievances also generally remain outside arbitration. Consumer protection legislation treats the relationship between consumers and sup- pliers as inherently unequal, and arbitration clauses in consumer contracts are subject to strict scrutiny. However, there is no specific legal prohibition on col-
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