An overview of mass litigation and some practical repercussions

by Marcelo Neumann

July 28, 2021


In recent years, an increase in the volume of consumer lawsuits in the Judiciary is gaining attention and importance in the consumer goods, e-commerce and services segments. When the Consumer Defence Code came into force in 1990, the topic did not compete with other areas of Law – considered more sophisticated – within companies’ legal departments.

Over time, however, and with the construction of a vast administrative regulatory structure, as well as the intense action of Public Prosecutor’s Offices (MPs), the risks embedded in the growing portfolios of mass litigation drew the attention of lawyers both in companies and law firms.

So, an initial challenge arose: how could the amounts spent on consumer claims be reduced? How could so many deadlines, hearings, compliances and payments be managed efficiently? Another challenge was how to divide the attention and management of the lawsuits. This is because it is important to classify and deal with them appropriately, as often a lowcomplexity claim can gain importance, when it involves, for example, the enforcement of a fine in millions.

In other situations, the very topic that is the subject matter of the claim has the potential to have negative repercussions on the market. In both cases, a more customised and detailed examination of the proceedings is necessary, even requiring the participation of the firm’s strategic litigation team.

The sophistication of the subject ended up creating a specialised market, with companies appointing specialised managers and teams to deal with the topic. In turn, firms began to perform activities that were quite different from what they had been used to, in which the focus was no longer just the legal technique and the outcome of the proceeding. The concern became volume management, with highly efficient teams and systems, focused on cost and results, involving the preparation of management reports, contingency analysis, “average ticket” per case, portfolio performance KPIs and probability of losing.

Currently, advances in technology allow the use of robots in the activity of risk management and control, as well as the insertion of jurimetrics as a strategic tool, in addition to other systems involving artificial intelligence.

This qualified management brings an enormous economic benefit for companies, maximising results in the claims and avoiding non-compliances, attachments and penalties.

In addition, the detailed mapping of the lawsuits and their subject matters provides companies’ internal areas with relevant information that can prevent future lawsuits, as well as allowing the allocation of the amounts spent to their appropriate cost centres.

Nevertheless, it allows for monitoring of contumacious plaintiffs and their respective lawyers, enabling targeted and strategic action.

A new question then arises: how to set contingencies for these amounts, considering the dispersion of claims and the characteristic subjectivity of this type of lawsuit? When it comes to a high-risk claim, a lawyer can review the claimant’s case and set a risk value and likelihood of losing. However, how can this be done with hundreds or thousands of lawsuits involving moral damages, which will be defined by the judge?

The answer is objective: through specialised and technological management. For an appropriate prognosis, various types of information must be mapped, such as subject matter, value, notary office, judge, average time and parties involved, among others.

The analysis and processing of these indicators provide a solid basis for provisioning, both in terms of value and time, allowing the contingency of amounts compatible with the real risk involved.

In short, consumer claims demand special attention and can represent a major liability for companies, but appropriate and efficient management minimises the risks involved. In addition, the information extracted can assist in the implementation of internal improvements related to the supply of goods and/or services, contributing to the company’s reputation in the market.


Marcelo Neumann

Partner, Lawyer

Marcelo Neumann is an associate at Dannemann Siemsen where he has been working since 2006. A lawyer, with a postgra[...]

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