BRAZIL Law and Practice Contributed by: Thaís Vasconcellos de Sá, Bermudes Advogados
One should be aware, however, of the fact that developing policies (and related procedures) for preparation and response to crisis is not an easy task. Apart from the inherent complexity of dealing adequately and efficiently with the mate- rial consequences of a crisis and mitigating the disruption it brings to the company’s activities, an adequate plan should also consider each of its measure’s legal effects on the company, the executives and employees involved. A plan should be feasible and establish meas- ures that are appropriate to each level of the response, ensuring that the measure to be taken is within that level’s authority and budget. Wish- ing to create a response plan with a best-case (but unattainable) scenario on paper will not help anyone when the crisis arises and will only open the door for future liability, as those involved in the response efforts will ultimately not be able to implement the plan as structured, and the company could be accused of failing to meet its obligations – here the engagement of exter- nal consultants (such as firms with appropriate expertise) proves helpful.
have overlapping constitutional and legal com- petences. Members of these institutions also enjoy “func- tional autonomy” meaning they are not bound by positions or acts taken by other members, even their superiors. Some institutions do strive to keep a consistent position and approach when dealing with a legal controversy/subject matter or even a specific company/crisis event, but this is not a rule and is not binding on their members. These overlaps of autonomy and competence frequently lead to the multiplication of legal measures against a company in crisis, and is a significant challenge in the Brazilian legal sys- tem. Given judicial measures from justice insti- tutions, other authorities or third parties in the aftermath of a crisis, and frequent demands for attachments of the company’s assets (including freezing amounts deposited in bank accounts), the company will need to be able to respond adequately to these demands in order to miti - gate their impacts (and the overall consequenc- es of the crisis) on its ability to continue its day- to-day activities. Close Oversight of the Response Efforts Another challenge is the fact that the efforts to respond to the crisis will also be under the spotlight, particularly from the Brazilian authori- ties, and can also lead to future litigation if not taken properly. The goal here will be finding the balance between a proper immediate response (being efficient and adequate to mitigate, repair or compensate the consequences of the crisis, particularly for third parties) but not falling into the trap of “doing everything at once” and creat- ing a chaotic scenario of overlapping measures that prove inefficient and that could expose the company to future liability.
5. Legal Strategy 5.1 Legal Challenges Overlapping Measures From Public Authorities
One of the most complex challenges that a company involved in a crisis will face is being able to properly respond to the legal demands brought against it. A company should expect to receive multiple (often overlapping) enquiries as well as face investigative proceedings and judicial measures from public and other authori- ties in Brazil – particularly the justice institutions (public prosecutors and public defenders), which
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