Collective protection of consumers in Brazil: the Bill for a new collective actions system

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Patricia Helena Marta Martins
TozziniFreire Advogados, São Paulo
phm@tozzinifreire.com.br

Luciana Bazan Martins Bisetti
TozziniFreire Advogados, São Paulo
lbazan@tozzinifreire.com.br

Introduction

The main exponents of the Brazilian microsystem for the protection of collective rights are the Public Civil Action Law (Law No 7.347/1985) and the Consumer Protection Code (Law No 8.078/1990) – rules which were issued more than three decades ago, in a social context totally different from the present.

After so many years, such standards, although relevant, have been shown to be increasingly ineffective in terms of consumer protection and their contribution to the evolution of the consumer society.

In an effort to update and improve this system, representatives of the National Council of Justice, a public institution likened to the Judiciary, recently established a working group to prepare a draft Bill aiming at creating a new regulation for collective actions.

Counsellors of the National Council of Justice, Ministers of the Superior Court of Justice and the Federal Audit Court, Judges, a prosecutor and renowned jurists participated in the discussions.

The draft Bill prepared by the National Council of Justice was presented to the Legislative Branch, before which it is currently being processed and awaiting deliberations (Bill No 4.778/2020, attached to Bill No 4.441/2020).

The Bill represents significant changes in the current system for the protection of collective rights. Among these changes, there are the following predictions: (1) adequate representation of consumer protection associations, a criteria that, with greater rigour, will serve to assess the procedural legitimacy of associations for acting in court; (2) extension of national effects to the collective ruling; (3) possibility of the parties entering into transactions at any stage of the process; (4) possibility and preference for extrajudicial execution of the collective sentence; and (5) the possibility of condemning the collective plaintiff to the burden of loss, with the payment of costs resulting from the process and its eventual defeat.

The search for legal certainty and the addressing of responses to controversies still in force in society were important motivations for the draft Bill presented by the National Council of Justice.

The aim of the Bill in question, put simply, is to guarantee efficiency to the collective protection system, either by unifying the provisions in the same normative text – which are currently dispersed in sparse laws – or by proposing changes capable of making the collective lawsuits faster.

This Bill is not the first initiative to emerge with these same objectives. Since the beginning of the 2000s, other similar proposals have been presented to the Legislative Branch, including a Preliminary Draft for the Code of Collective Procedure (Bill No 5.139/2009). These Bills, however, have not progressed. Hopes are higher for the Bill currently underway since it originated from an initiative of the Judiciary itself, which gives it greater reputational authority.

Indeed, the presentation of the Bill was mostly well received by the Brazilian legal community. Many of the innovations suggested in the text echo and resolve academic and jurisprudential debates faced daily by professionals involved in the study and operation of collective causes.

Although celebrated by most, there are legal experts critical of the Bill in question. The negative position is based on the understanding that the terms suggested by the text may hinder the defence of collective rights in Brazil, because the adequate representativeness of associations can be a factor that restricts their access to the Judiciary.

In addition, there are criticisms directed to the moment and context of the Bill’s presentation, already chaotic due to the health crisis faced in the country, with no structures to support profound changes such as those suggested.

Criticism aside, the National Justice Council’s initiative seems to portray an unquestionable reality: the ineffectiveness of the current system in serving the consumer society and the pressing need for change.

Official data from the National Justice Council indicate that consumer rights are the most recurrent subject of lawsuits pending before the State Court of Justice. Debates about supplier liability and moral damage total 2,295,880 lawsuits. Most of these lawsuits are pending before the Special Civil Courts, which are responsible for 1,554,088 cases.

The collective process, if well structured, can circumvent a significant part of the problems represented by the numbers indicated above, mainly due to its capability to reduce the number of disputes in course.

In Brazil, for this to be the case, it is still necessary for the collective process to be rethought, remodelled and adapted, including through legislative innovations, so that it can serve as a tool for the effective and quick resolution of consumer disputes.

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