by Felipe Dannemann Lundgren
June 01, 2006
As of June 22, 2006, Law No. 11,232/05 will come into force. This law amends several provisions of the Brazilian Civil Procedure Code and promises to change the system for in-court execution of judgment completely (except for execution of judgments against the Public Treasury).
Such law modifies the concept of sentence itself under the Brazilian civil procedure provisions and unites the discovery and execution phases into a single proceeding.
According to Law No. 11,232/05, a judgment is no longer "an act by which the judge concludes a case," but rather the act that "results in one of the situations provided for in Articles 267 and 269 of the Civil Procedure Code". This introduces an important change to Brazilian civil procedure rules, because the judgment no longer merely concludes the discovery proceedings and initiates the execution proceedings. After reaching a verdict, the Judge will continue to exercise his jurisdictional authority to ensure that the judgment is enforced and that the prevailing party collects the amount due.
The new law also extinguishes the requirement for new personal summon of the defendant in order to start the execution proceedings. Moreover, it will no longer be possible to file a stay of execution, which will be substituted by a simple impugnation by the Defendant.
Under Article 475-J of the new law, the first instance judgment will apply immediately and the defendant will be obliged to pay the amount awarded within fifteen days, subject to a 10% fine on the amount awarded in case of non-compliance.
Additionally, consistent with the provision of Article 475-P, sole paragraph, the prevailing party (creditor) "may choose to execute the judgment in the court in which the Defendant owns assets subject to expropriation, or in the district in which the Defendant is resident (or, in case of companies, where its main seat is located)". This represents another significant change to Brazilian civil procedure rules.
The main goal of the changes introduced by this new law is to try to expedite the proceedings in the Brazilian Courts. Law No. 11,232/05 aims to erase the sense of those who litigate in Brazilian Courts that although the party obtained a favorable judgment, it was not possible to execute it, i.e., to actually receive the amount of the condemnation. The new system promises to improve the effectiveness of first-instance judgments and reduce the so-called "Brazilian cost" to which the long and complex proceedings in Brazilian Courts contribute to a big extent.
Naturally, only the enforcement of the new law will confirm whether the changes will effectively expedite the proceedings in Courts.
Unfortunately, the legislator missed an excellent opportunity to make a complete reform in the Brazilian execution proceedings by not changing the procedures for collecting Public Treasury debts. As widely known, the Public Treasury (Federal Government) is the country’s biggest debtor and, therefore, the party with most pending lawsuits in the Brazilian Courts. To its own privilege, the Public treasury will maintain the benefit of having an entirely new process to execute debts against it, in opposition to the private parties, to which the discovery and execution proceedings will be united into a single process.
In any case, everything indicates that the recent reforms will initiate important changes in the paradigm of the Brazilian civil procedure system and that they will benefit those litigating in Brazilian courts, especially those with receivables to collect.