Reward sanctions and behavioural inducement

In any organised society, rules are fundamental to enable harmonious coexistence[1]. Without defined guidelines for behaviour, disorder and insecurity would prevail.

In general, it is the State’s responsibility to monitor compliance with rules. And one of its tools are sanctions, considered an instrument to direct society.

Sanctions can either be negative (punishing transgressors) or positive (rewarding behaviour).[2] That is, punishing is only one form of discipline, but not the only form.

In simple terms, sanctions are the negative (repressing) or positive (rewarding) consequence laid down by the legal system to stimulate a particular behaviour.[3]

Over time, the logic of rewards and promotional bias has gained importance, since the “punitive technique has proven to be too simplistic and inadequate”[4].

In this context, reward sanctions[5], which help to form a system of incentives aimed at promoting socially desirable behaviours, by compensating virtuous conduct[6], the effects of which radiate into the future[7], are highlighted.

In fact, it is necessary to “rescue the function of the legal order, which is to improve social life, by stimulating desirable and repressing unwanted behaviour”[8].

In practice, reward sanctions foster the creation of a feedback loop of positivity, functioning as behavioural inducements, which favours the early achievement of goals and obligations[9].

Just think, for example, of the annual obligation of taxpayers to pay the Building and Land Tax (IPTU), with the possibility of taking advantage of a percentage discount, if the payment is made before the due date. The system encourages taxpayers to advance the payment in exchange for an individual benefit (a percentage discount – a reward sanction). It should be noted that individuals are not obliged to adopt this behaviour, but, if they do, they will be entitled to the reward.

The logic of rewards can also be seen in rental agreements (allowance or punctuality bonus). On the matter, one of the authors of this article has had the opportunity to illustrate this in a vote handed down in Special Appeal (REsp) 1,424,814/SP:

Alongside the direct measures that act immediately on the behaviour of individuals (materially prohibiting them from violating rules or compelling them to act in accordance with rules), indirect measures that psychologically influence individuals to act in accordance with rules have gained importance. Thus, the promotional legal system, for the purpose of preventing unwanted social behaviour, is not limited to making this conduct more difficult or disadvantageous, imposing obstacles and punishments for noncompliance with rules (the technique of discouragement, through negative sanctions). The promotional legal system goes further, it goes against the desired social behaviour, stimulating the observance of rules, either by facilitating compliance therewith, or through the granting of benefits, advantages and rewards arising from the fulfilment of the socially appropriate conduct laid down in the rule (the technique of encouragement, through positive sanctions).[10]

In the criminal area, plea bargaining agreements are fertile ground for reward sanctions, especially in the realm of substantive law. With some frequency, disputes of this nature are settled by the Judiciary.[11]

Also in the criminal sphere, the figure of whistle-blowers should be mentioned[12] – a moral informant – provided by Law no. 13,964/19 (AntiCrime package). In cases of crimes against the public administration, informants will be reimbursed with up to 5% of the amount recovered when the information provided by them facilitates “recovery of the proceeds of a crime” (Article 4-C, §3, of Law no. 13,608/18).

In the area of tax, Articles 138 and 160, sole paragraph, of the National Tax Code should be mentioned.

With respect to Article 138, which introduces the institution of spontaneous reporting, the Superior Court of Justice (STJ) decided that the hypothesis arises when taxpayers, having made a partial declaration of a tax debt through self-assessment and payment pending future approval by the Tax Authority, rectify it before any action by the latter, reporting the existence of a larger debt and making the payment at the same time. In accordance with the STJ, “reward sanctions contained in the institution of spontaneous reporting exclude financial penalties”[13], that is, fines resulting from late payment by taxpayers.

While in the field of civil procedure, many provisions include benefits to stimulate particular conduct or behaviour.

For example, Article 90, §4, of the Code of Civil Procedure (CPC) establishes that, if defendants recognise the merits of a claim and simultaneously fulfil the obligation, fees will be reduced by half.

With respect to monition actions, if defendants pay the debt within the legal period, including the percentage of 5% (five percent) for lawyers’ fees (half of the legal minimum), they will be exempted from the procedural costs (Article 701, heading and §1, of the CPC).

From the perspective of enforcement, if debtors pay the debt in full within 3 (three) days, the value of the lawyers’ fees will be reduced by half (Article 827, §1, of the Code of Civil Procedure (CPC)[14]). Within the period of the motion to stay enforcement, if debtors recognise the creditors’ credit and prove payment of thirty percent of the value of the enforcement, plus costs and fees, they may pay the remainder in up to six monthly instalments, plus monetary restatement and arrears interest of one percent per month, regardless of the creditor’s agreement (Article 916 of the CPC). The option to pay in instalments gives rise to a waiver of the right to file a motion to stay enforcement (Article 916, §6).

The logic of rewards can also be explored in procedural agreements entered into before or during proceedings (Article 190 of the Code of Civil Procedure (CPC)).

For example, it is possible for litigating parties to agree that, if the debtor offers some suitable property as collateral before any judicial lien is created, the creditor will be prevented from creating a lien on a specific asset indicated by the debtor (Articles 833, I together with 848, II, of the Code of Civil Procedure (CPC)). At the enforcement of decision stage, the parties could also agree to remove the prohibition contained in Article 916, §7, of the CPC (which expressly prohibits payment in instalments in this area), if the debtor presents – within the period in Article 523 of the CPC, together with the payment of 30% of the debt –, a surety for the remainder of the debt.

Finally, the possibility of judges themselves stipulating rewards to stimulate behaviour (atypical reward sanctions) is currently being discussed[15], in light of Article 139, IV, of the Code of Civil Procedure (CPC) (“inducement measures”) [16] . The topic is still new, but the initiative, at least in perspective, seems possible, provided that certain requirements are observed (not affecting the rights of others, impossibility of externalities being transferred to the Judiciary, need for adequate reasoning and observance of the principle of proportionality).[17]

In this regard, it should be recorded that the Superior Court of Justice recognises the possibility of the coexistence of reward sanctions and punitive sanctions[18]. Thus, in the same court ruling, judges can establish both an atypical reward sanction and a punitive sanction.

For example, suppose that, in a suit to perform an act (in this case, two different measures), the judge sets two deadlines in the ruling: 10 (ten) days for the first, under penalty of a daily fine of BRL500,00 (five hundred Brazilian reais), and 30 (thirty) days for the second, under penalty of a daily fine of BRL2,000.00 (two thousand Brazilian reais). Additionally, the judge may establish that, if the first obligation is complied with the period of 10 (ten) days, the “balance” of the days may be added to the period previously established for the second obligation. That is, if the first obligation is complied with in 5 days, the party will have 35 days to comply with the second obligation. The judge could even lay down a rising scale of fines to further strengthen the court order.

Hence, debtors can better manage their obligations, anticipating something that, for them, is easier and gaining additional time to comply with a more “complex” obligation, which also benefits the creditor.

A final note: when Rudolf von Ihering, back in the 19th century, predicted that “one day, legal scholars will deal with reward law” [19], he probably could not have imagined the multiple repercussions and consequences of the study on reward sanctions, which have today infiltrated our legal system and can contribute to the rationalisation of jurisdictional remedies themselves.

[1] DURKHEIM, Émile. Les règles de la méthode sociologique. Paris: Flammarion, 2010.

[2] BOBBIO, Norberto. Dalla struttura alla funzione – Nuovi studi di teoria del diritto. Milano: Edizioni di Comunità, 1977, p. 87.

[3] BENEVIDES FILHO, Mauricio.  O que é sanção? [What are sanctions?] Law School Journal, Fortaleza, volume 34, no. 1, pages 355-373, Jan./Jun. 2013 Available at https://repositorio.ufc.br/bitstream/riufc/11850/1/2013_art_mbenevidesfilho.pdf. Accessed on: 08 June 2022.

[4] MELO FILHO, Álvaro. Introdução ao Direito Premial. [Introduction to Reward Law] Thesis submitted as a partial requirement to obtain a master’s degree in Legal Sciences. Rio de Janeiro Pontifical Catholic University, 1975, pages 172-174.

[5] The expression reward sanction is already affirmed in a) law (e.g., chapter IV of Complementary Law no. 29/2004, in the Municipality of Mogi das Cruzes/São Paulo State); b) doctrine (e.g., BENEVIDES FILHO, Mauricio. A sanção premial no direito [Reward sanctions in law]. Brasília: Brasília Jurídica, 1999; and c) case law (e.g., Supreme Federal Court (STF), Action of Direct Unconstitutionality (ADI) 1,923/Federal District, Reporting Justice Ayres Britto, Reporting Justice for the judgment Luiz Fux, Plenary Court, electronic Justice Gazette (DJe) 17 December 2015). The expression is also contained in the section “Legal Vocabulary”, on the Supreme Federal Court’s website, with the following note: “Use to refer to the positive legal consequence of complying with a rule”. Available at. https://www.stf.jus.br/portal/jurisprudencia/listarTesauro.asp?txtPesquisaLivre=SAN%C3%87%C3%83O%20PREMIAL. Accessed on: 08 June 2022.

[6] “(…) “sanctions are not always and necessarily a punishment. They are a mere legal consequence that is triggered (incurred) in the event of the main commandment of a rule being disobeyed. The vulgar statement, unfortunately repeated by some legal scholars, to the effect that sanctions are punishments is a prejudice that needs to be dispelled – since it is flagrantly unscientific. It can be sometimes. Not often”. ATALIBA, Geraldo. Hipótese de incidência tributária [Hypothesis of tax levying]. São Paulo: Court Journal, 1973, page 38.

[7] SILVA, Antônio Álvares da. Sanção e direito do trabalho [Sanctions and employment law]. Belo Horizonte: RTM, 2014, page 16.

[8] CARPENA, Heloisa; ORTENBLAD, Renata. Ganha mais não leva. Por que o vencido nas ações civis públicas não paga honorários sucumbenciais ao Ministério Público? [It wins but it doesn’t benefit. Why does the losing part in public civil actions not pay loss of suit to the Public Prosecutor’s Office?] Lawsuit Journal. São Paulo: Court Journal, no. 280, Jun./2018, page 347.

[9] CORDOVIL, Leonor Augusta Giovine. A sanção premial no direito econômico [Reward sanctions in economic law]. Afonso Pena Academic Centre Journal – Law School at Minas Gerais Federal University (UFMG), no. 1, 2004, page 158.

[10] Special Appeal (REsp) 1.424.814/SP, Reporting Justice Marco Aurélio Bellizze, Third Panel, electronic Justice Gazette (DJe) 10 October 2016.

[11] The Supreme Federal Court (STF) has already established that determining reward sanctions not expressly laid down in Law no. 12,850/2013, but accepted freely and consciously by the investigated party, “do not invalidate the agreement”. STF, Internal Interlocutory Appeal (AgRg) in Inquiry no. 4,405/Federal District, Reporting Justice Luís Roberto Barroso, First Panel, electronic Justice Gazette (DJe) 05 April 2018.

[12] On the matter, see GABRIEL, Anderson de Paiva. Whistleblower no Brasil: o informante do bem. [Whistleblowers in Brazil: moral informants]. Available at https://www.jota.info/opiniao-e-analise/colunas/juiz-hermes/whistleblower-no-brasil-o-informante-do-bem-20042020. Accessed on: 08 June 2022.

[13] Special Appeal (REsp) 1,149,022/SP, Reporting Justice Luiz Fux, First Section, electronic Justice Gazette (DJe) 24 June 2010.

[14] “(…) instead of seeking this voluntary performance by imposing a threat, as happens in the provision of the legal fine referred to in Article 523, §1, of the Code of Civil Procedure (CPC), the legislator chose to use an incentive. It is an example of what is conventionally called a reward sanction, thus held as the technique through which one seeks to induce voluntary compliance with an obligation by means of an incentive”. DIDIER JR., Fredie; CUNHA, Leonardo Carneiro da; BRAGA, Paula Sarno; OLIVEIRA, Rafael Alexandria de. Curso de Direito Processual Civil: execução [Course on Civil Procedural Law: enforcement]. v. 5. 7. Publisher Salvador: JusPodivm, 2017, page 752.

[15] Judges start to grant rewards to incentivise compliance with rulings. Available at https://valor.globo.com/legislacao/noticia/2021/03/11/juizes-passam-a-conceder-premios-para-incentivar-o-cumprimento-de-decisoes.ghtml. Accessed on: 08 June 2022.

[16] It should be highlighted that the constitutionality of the provision is being questioned by the Supreme Federal Court (STF). In Direct Action of Unconstitutionality (ADI) no. 5,941/Federal District (DF), filed by the Labour Party (PT), the possibility of adopting inducement measures is not questioned, but rather coercive measures that may violate fundamental rights and guarantees laid down in the Federal Constitution, especially the seizure of a national driving license and/or suspension of the right to drive, seizure of a passport, prohibition from taking part in civil service examinations and prohibition from taking part in public tenders.

[17] MAZZOLA, Marcelo. Sanções premiais no processo civil: previsão legal, estipulação convencional e proposta de sistematização (standards) para sua fixação judicial [Reward sanctions in civil procedure: legal provision, stipulation in agreements and proposal for standards for judicial setting thereof]. São Paulo: JusPodivm, 2022.

[18] “Thus, the coexistence of negative sanctions, consisting of serious and/or punitive consequences arising from noncompliance with the obligation, is absolutely possible, with the stipulation of means capable of facilitating compliance, or even of advantages (positive sanctions) to the contracting party who, in the agreed time and manner, complied with its agreed”. Superior Court of Justice (STJ), Special Appeal (REsp) 1.579.321/São Paulo, Reporting Justice Paulo de Tarso Sanseverino, Third Panel, electronic Justice Gazette (DJe) 21 February 2018.

[19] “One day, legal scholars will be concerned with reward law. And they will do so when, pressured by practical needs, they manage to introduce the subject of rewards into law, that is, beyond mere option and will. Delimiting them with precise rules, not so much in the interest of the aspirant to the reward, but, above all, in the superior interest of society. IHERING, Rudolf von. A luta pelo direito [The battle for law]. Trad. João de Vasconcelos. Rio de Janeiro: Forense, 1997, page 67.