‎Brazil News

 

 

The path to reducing the backlog of more than 81 million processes in progress in Brazil goes through large companies. This is the view of Rafaella Carvalho, legal director of the construction company Cyrela, who argues that companies can play a big role in de-judicializing conflicts. “From the moment a company decides what its stance will be in the face of conflicts, it impacts the way its partners, suppliers, employees and customers think about the subject,” said Carvalho.

 

The director was one of the participants in the 5th CBMA International Mediation Congress, which took place in Rio de Janeiro on the 9th and 10th of November. Over the two days of the event, several speakers discussed how Brazilian culture needs to evolve beyond the legal dispute and how companies can help in this direction.

 

In the view of the Cyrela executive, the way for companies to combat the “litigation culture” involves investing in alternative channels. “Companies need to be prepared so that the alternative to the Judiciary is a good one. If you have a positive experience on the channel provided by the company, you are more likely to prefer that channel to another in the future”, said Carvalho.

 

 

“Companies may have to make a larger investment to achieve the objective, but they will certainly reap rewards in the long term”, said the director.

 

According to Michele Lyra, senior legal litigation lawyer at the energy company Shell, the “litigation culture”, even if it is not a “Brazilian jabuticaba”, needs to be addressed to avoid unnecessary costs and delays.

 

“This culture leads companies to waste time and spend on lawyers and processes. Furthermore, they are also subject to a reputational impact, as the legal dispute can impact the market and share price. All of this needs to be taken into consideration when evaluating the best way to resolve conflicts,” said Lyra.

 

The culture of judicialization

Diego Vasconcelos, president of the special dejudicialization commission of the Federal Council of the Brazilian Bar Association (OAB), argued that it is necessary to first understand the nature of the problem before thinking about how to resolve it.

 

Vasconcelos cited three points that he considers fundamental for understanding the Brazilian legal context. The first is the reputation of the judiciary as a whole. “The institutional reputation is so good that people feel safe resolving conflicts there,” said the speaker.

 

The second point he mentioned was the low cost of the processes. “It is an economic incentive for judicialization: 85% of cases in the judiciary do not pay costs. It’s cheap to litigate,” he said.

 

The third point listed by the president of the OAB commission was the current Brazilian legal education model. According to the expert, since the first law school in Brazil, judicialization has been prioritized to the detriment of other forms of conflict resolution.

 

“It is necessary to have a critical look and assume institutionally that Brazil needs to agree on a national policy of dejudicialization that involves all judicial bodies, the CNJ, the Public Ministry, the OAB and all interested agents of society”, said Vasconcelos.

 

The cultural challenge is such that some lawyers present in Congress cited cases in which not even the existence of an escalation clause, which defines procedures to be followed if a dispute arises between the parties, were sufficient to avoid a greater conflict.

 

“I thought that a well-drafted tiered clause would be the solution to all problems, but I have seen many lawyers only complying with the schedule and not actually willing to resolve the conflict through mediation,” said Vera Barros, from Selma Lemes Advogados.

 

* The report traveled at the invitation of the 5th CBMA International Mediation Congress