Online dispute resolution and means of negotiation

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Priscila Sansone
Veirano Advogados, São Paulo
priscila.sansone@veirano.com.br
 

Amanda Rudzit
Veirano Advogados, São Paulo
amanda.rudzit@veirano.com.br

Measures to increase the use of online platforms for negotiations and ‘non-typical’ mediation initiatives, such as dispute resolution alternatives in consumer relations, have been increasing in popularity in Brazil.

Within the private sector, there are several successful examples encouraging consensual dispute resolution options. These vary from: the adaptation of the United States Dispute System Design (or DSD), which follows a process of mostly identifying and designing the best effective means to resolve conflicts according to the idiosyncrasies of the corresponding market, field of business, affected stakeholders and so on; to individual platforms developed by online sales players with a genuine interest in decreasing the number of consumer disputes reaching Brazil’s courts.

Recently, an interesting example in the public sector is the www.consumidor.gov portal ('Consumidor.gov'), which is one of the strongest projects promoted by the latest administration of the National Consumer Secretariat (SENACON) from the Ministry of Justice and Public Security. Consumidor.gov is an online portal that allows direct communication between suppliers and consumers in an attempt to resolve consumer conflicts online. It is a classic example of online dispute resolution (ODR) focusing on conciliation, which seems to be the best strategy for consumer-related disputes. The portal is monitored by SENACON and other consumer protection bodies, such as Procuradoria de Proteção e Defesa do Consumidors (PROCON) and Public Attorney Offices, who assess the degree of demands resolution. According to SENACON,[1] 80 per cent of complaints registered on Consumidor.gov are resolved by suppliers without needing to go to court. Even more recently, SENACON has started intervening in claims, allowing the parties access to a non-typical mediator, who acts for both of the parties in an attempt to reach a consensual settlement agreement.

During the Covid-19 pandemic in Brazil, SENACON enacted an Ordinance determining the mandatory enrolment on the Consumidor.gov platform for companies (or economic groups in which they participate) that:

• have gross revenues of at least BRL100m (approximately $18.8m) in the last fiscal year;
• have reached a monthly average equal to or greater than 1,000 complaints in its customer service channels; and
• are being sued in more than 500 judicial lawsuits that discuss consumer relations.

In addition to such requirements, companies must also fulfil any of the following requirements in order for the enrolment to be mandatory:

• having national or regional operation involving public services and essential activities;
• digital internet service platforms for the transport of passengers and food, or the promotion, offer or sale of own products or third-party products to final consumers; or
• economic agents listed among the 200 companies with more complaints registered in the National Consumer Defence System in 2019.

This more strict approach shows Brazil’s government’s strong tendency for conciliation, mediation, ODR and negotiation in an attempt to avoid judicial courts, which are totally overwhelmed due to huge volume of claims brought to them on a daily basis, several of which discuss consumer-related disputes.

Mediation and negotiation are being especially motivated by all sorts of consumer claims arising from the Covid-19 pandemic. The federal government has enacted the Provisional Measure No 948/2020 to regulate the cancelling of services, reservations and events in tourism and culture as a consequence of social distancing measures and the state of emergency resulting from the pandemic. The Provisional Measure promotes negotiations of settlements between suppliers and consumers to reach agreement and prevent litigation in court.

PROCON, which is a state administrative consumer protection body in São Paulo, has also recommended negotiation between consumers and suppliers from several sectors, including tourism, events, education, physical activities and other services, as the best option for resolving disputes resulting from the pandemic. The PROCON will not only assist in such negotiations, but reiterated that, in this moment of crisis, it is important to seek balance and agreement in the relations between suppliers and consumers by means of acting in good faith and with balance and unity. All in all, to try to mitigate consumer/supplier conflicts, intensified by the pandemic, the body has adopted the praiseworthy stance of attempting to make consumer protection compatible with the need for continued economic growth.

Conclusion

Brazil’s judicial system has always suffered greatly from the excessive number of pending cases, as well as from the country’s litigious culture, which constantly adds to the increasing numbers of lawsuits. The consumer protection structure in Brazil is also highly protective of consumers, which tends to increase mass consumer litigation. Several court cases stem from claims involving extremely simple matters and discussing quite low amounts, which could easily be resolved by extrajudicial means, including conciliation, mediation and negotiation with suppliers. In fact, there have been a few court decisions which recognise the lack of procedural interest in the lawsuit due to the lack of a resisted claim if consumers do not first attempt to resolve demands through companies that provide extrajudicial complaints resolution forums, such as proven, effective customer service channels. In the end, it is hoped that the more recent measures promoted by consumer protection bodies to endorse conciliation and negotiation, will reduce the volume of lawsuits, as well as boost alternative dispute resolution methods. This is undoubtedly worthwhile for all the stakeholders involved.

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