Companies Should Review and Reevaluate Their Strategies for Handling High Volume Consumer Litigation

Brazil’s Law for the Protection of the Consumers, enacted September 11, 1990 (Law No. 8.078) is among the most developed in the world. Citizen’s access to the legal system has become increasingly facilitated and objective with country-wide establishment of consumer protection bureaus (PROCONS) and Special Courts. Strict enforcement of judgments in the area, with the setting of moral damages, daily fines and online liens, has intensified the impact of these claims on companies.

Increased consumer awareness and access to the legal system has meant a higher number of suits filed by final consumers against manufacturing companies or service providers, peaking with the privatization of government-run companies and the granting of government concessions for these services. Examples include land-line and mobile telephony; electric power distribution and supply; and maintenance and exploitation of public roadways.

In the case of public service concessions, in addition to inheriting the legacy of problems from many former administrations, the privatized companies have also become responsible for legal procedures combating existing problems, many very persistent. These issues have prompted the new and large quantity of suits filed daily in every corner of the country.

The main problem occurred and still occurs because the issues, as a rule, are handled in the late stages, at a moment when they have already become litigious. Worse yet, the legal background does not provide information to a database in order to understand the origins of the lawsuit and thus correct any problems. This vicious cycle has led to an exponential rise in the number of suits, and serious problems in managing and dealing with them.

The management of volume litigation needs to be reviewed, for the lack of preventive measures and logistics by the companies has contributed to an overload of court cases, not to mention expenses with heavy fines, recurring pain and suffering damages, uncontrolled filing of online attachments, noncompliance with court protection, among other problems.

Companies need to review consumer liabilities with logistical and feedback tools from their different departments. This would allow them to minimize the financial consequences of these suits, to accurately diagnose key problems, and of course to identify possible solutions.

Based on this rationale and two years of research in corporate prevention related to consumer relations, having mapped out and monitored all possible ramifications of the problem in many different segments, the law firm Dannemann Siemsen Advogados has developed a new methodology for handling high volume litigation. Its new Consumer Relations division has dedicated itself to this matter, working not only to handle companies’ consumer liabilities demands, but also to apply the knowledge gained from managing these portfolios to help them prevent litigation, optimize costs and reduce provisioning reports and liabilities, thereby strengthening the value of their mark.

The professionals at Dannemann Siemsen Advogados – Consumer Relations are specialists in consumer litigation, trained to find expeditious and ethical legal solutions to our clients’ client-consumer conflicts. We help strengthen their marks and client loyalty with a determined preventive mission aimed at the effective and gradual reduction of exposure.