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The year in review

In Brazil, 2018 was marked by: (1) an important judgment from the Superior Court of Justice related to staying individual lawsuits while pending a class action; (2) enactment of the Brazilian General Data Protection Act with specific sections related to class actions; and (3) the rollout of incidental proceedings for the resolution of same subject matter lawsuits as the New Civil Procedure Code (Law 13,105 of 2015) entered its second year after coming into force.

With regard to the first point, in December 2018 the Superior Court of Justice rendered a decision in order to stay all individual lawsuits seeking indemnification due to damages caused by environmental contamination related to the exploitation of a lead mine in the city of Adrianópolis, state of Paraná. This decision was rendered within the system of repetitive appeals, which means that it will be applied to all lawsuits related to the already mentioned environmental contamination. The established thesis determines that the individual lawsuits must remain suspended until the final judgment of the class action related to the same fact.

In spite of being a decision related to a specific case involving environmental law, the case precedent has procedural outlines and may have consequences for the entire class action system. The Consumer Defence Code expressly points out that there is no lis pendens between class actions and individual lawsuits (article 104) and, as a rule, individual lawsuits were not stayed while pending judgment of a same related class action. What we identify is a tendency of the Superior Court of Justice to avoid the possibility of divergent decisions on the same question by law and perhaps in fact. In practice, such decision from the Superior Court of Justice may lead to even greater attention and importance for a class action, whose evidentiary instruction and result will probably influence – in an even more sensitive way – the result of individual lawsuits on the same fact.

With regard to the second point, it is worth noting that on 10 July 2018, the Brazilian National Congress approved Bill No. 53/2018, which was subject to presidential sanction on 14 August 2018, and Law No. 13,709/2018, the Brazilian General Data Protection Act, which is now in place (with an 18-month vacatio legis period). It is important to highlight: (1) Section 22 specifically stating that the interests and rights of consumers and data holders may be exercised through class actions; and (2) Article 43, Section 3º, stating that class actions can be filed seeking to redress collective damages and pursue indemnification when someone, while processing personal data, causes property, moral, individual or collective damages, in violation of the Brazilian General Data Protection Act.

On the third point, the incidental proceeding for resolution of same subject matter lawsuits introduced by the New Civil Procedure Code (Law 13,105 of 2015) aims to (1) expedite the administration of justice and access to court relief; (2) reduce caseloads; and (3) generate uniformity in court decisions. In general terms, the New Civil Procedure Code establishes that an incidental proceeding for resolution of same subject matter lawsuits can be brought when there is an actual repetition of cases involving the same matters in controversy (matters of law only) and a risk of offence to equitable treatment and legal certainty. As a rule, all lawsuits (including class actions) are put in abeyance until this proceeding is adjudicated upon, and all subsequent judgments must follow the decision on the incidental proceeding for resolution of same subject matter lawsuits.

To date, the Brazilian Justice Council has reported approximately 141 incidental proceedings for resolution of same subject matter lawsuits involving consumer law, tort, civil procedure and other subjects. This new proceeding has been praised as a part of the Brazilian court precedents system based upon binding precedents, and intends to unclog Brazilian courts.

Nevertheless, the Brazilian court precedents system is not meant to grant court relief directly to claimants, but rather to define legal principles to be followed in all individual and class actions. Consequently, it is possible to say that the class actions system and the Brazilian court precedents system are complementary. Class actions remain as an important tool to address threats or injuries to rights and interests that would not qualify for protection via traditional individual actions.