Given the unique features of the Brazilian legal system, seeking advice from experienced local counsel specializing in Brazilian law is crucial.
Legal systems around the world have distinctive characteristics, and the Brazilian legal system is no exception. As such, seeking advice from experienced local counsel specializing in Brazilian law is of utmost importance when dealing with legal matters in the country.
A notable feature of the Brazilian legal system is the existence of a specific type of attorney’s fees known as "honorários sucumbenciais" or "honorários de sucumbência," which translates into defeat fees. These fees, paid by the losing party in a lawsuit to the prevailing party’s attorney, play a significant role in litigation and can have a substantial financial impact. Therefore, grasping their implications is vital when navigating legal disputes in Brazil.
Understanding the concept of defeat fees can be challenging for foreign clients or attorneys, as many countries do not have similar fees. Unlike expenses reimbursed to the winning party, defeat fees are independent compensation directly paid to the prevailing party’s attorney as a result of the losing party’s defeat in a court dispute.
Defeat fees are typically a percentage, ranging from 10% to 20%, of either the disputed amount or the amount claimed by the plaintiff. The Brazilian Code of Civil Procedure provides guidelines for calculating these fees, which are determined by the Court in its final decision. Several factors are taken into consideration in the calculation, such as the duration of the proceedings (including the number of appeals to higher Courts), the complexity of the issues involved, and the parties’ conduct towards the Court and each other.
Defeat fees can be a double-edged sword. On one hand, they encourage parties to carefully evaluate the strength of their claims before pursuing litigation. On the other hand, they can pose barriers for individuals and companies with limited financial means to access the judicial system.
Therefore, effectively navigating the Brazilian legal system requires careful consideration of the pros and cons of pursuing litigation in the country. Our team of experienced attorneys specializing in cross-border litigation is well-equipped to provide valuable guidance and insights. We can help clients understand the potential impact of defeat fees on their overall litigation strategy.
Our Dispute Resolution team offers preliminary counseling to clients. We assess, for instance, whether clients should explore alternative dispute resolution methods, such as mediation and arbitration, which often do not involve defeat fees. By opting for these methods, our clients can enjoy distinct advantages, including shared costs based on prearranged formulas.
In summary, defeat fees are a fundamental aspect of Brazilian court disputes. Understanding their criteria and implications is vital. Our team is dedicated to providing clients with legal expertise on cross-border litigation and is ready to help you effectively and strategically navigate Brazilian legal proceedings.
If you have any questions or require further information, please do not hesitate to contact us.
