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Posts Tagged ‘collective action’

After becoming one of the hottest trends during the latter part of the last decade, developments in international class action law have waned a bit over the past couple of years, but a new case may be changing that trend.  An Austrian law student, Max Schrems, made news earlier this week (see examples here and here) when he announced a “class action” against Facebook Ireland, the subsidiary that offers the popular social networking service outside of North America.  Schrems has filed a lawsuit in Austria seeking to pursue, on behalf of himself and other non-North American claimants, a variety of legal claims relating to Facebook’s use of consumer data as well as alleged illegal tracking and surveillance activity.  As reported yesterday by Natasha Lomas at Tech Crunch, more than 25,000 individuals have “joined” the lawsuit so far, by signing up at a website set up for that purpose and assigning their claims to Schrems.

This is by no means the first data privacy lawsuit ever filed against Facebook, and it is difficult to say at this point whether the legal claims have any prospect of success.  However, the case is intriguing from a procedural point of view because it is a suit seeking collective redress on behalf of thousands of non-North American consumers in a jurisdiction that is not known as a hotbed of class action litigation.  Many features of the case serve to illustrate differences between US-style class actions and “class actions” as they are developing in other parts of the world.  I’ve highlighted a few of them below.

Opt In Versus Opt Out

Outside common law jurisdictions like the United States, Canada, Israel, and Australia, collective action procedures generally follow an opt-in model, where each individual litigant has to take affirmative steps to participate in the lawsuit. This is a major distinction with the Rule 23 model followed in the United States, where a certified class binds all class members unless they expressly opt out of the case, and it creates a major limitation to the leverage created by grouping claims together.

Class Action through Private Contract and Novel Application of Existing Procedures

Many civil law countries lack an express mechanism for grouping large numbers of similar claims together into a single case except in very limited circumstances.  Even when specific collective action procedures exist, they can often be pursued only by a consumer association or government regulator rather than by private litigants.  Private litigants have filled the gap by entering into private agreements in which they group together on their own by assigning their individual claims contractually to a single plaintiff who will pursue the claims as a group.  Aggregation of claims by assignment has become a popular practical vehicle for pursuing group litigation, especially in continental Europe.

In Austria, a July 12, 2005 decision by the Austrian Supreme Court set out a two factor test for deciding whether assigned claims can proceed in a single case.  loosely translated, the standard requires that there be some central or significant question common to all claims, and that the factual and legal issues arising out of the individual claims be homogenous in nature as they relate to the common questions.  The Commercial Court of Vienna has applied this standard in several cases to make an initial determination of whether to “admit” the action, or in other words allow the assigned claims to proceed in a single case.  This initial evaluation does bear a resemblance to the class certification procedure applied under Rule 23 of the Federal Rules of Civil Procedure, applicable to class actions in the U.S. courts.

For a more detailed description of the “Austrian-style class action” procedure, see Christian Klausegger‘s chapter on the subject in the World Class Actions book that I have shamelessly promoted on this blog since its publication in 2012.

Litigation Funding

In Austria, as in many other parts of the world, contingent fees are prohibited.  At the same time, however, court fees are often assessed based on the total amount in dispute, so the more money in dispute, the higher the fees are that have to be paid to the court, in addition to the hourly fees to be paid to counsel. These factors combined significantly limit the incentive to pursue collective litigation in these jurisdictions. They have also led litigants to have to look for alternative ways of funding litigation, the most prevalent of which is private litigation funding by a for-profit institution that is not itself a law firm.  The litigation funder finances the litigation, including payment of court fees and hourly attorney fees, in exchange for a contractual right to earn a profit if the litigation is successful.

Litigation funding is also available in the United States, but it has been slower to develop, primarily because contingent fees and agreements to advance litigation costs do not typically violate rules of ethics or public policy. In fact, the opposite is true: rules prohibiting fee-sharing with non-lawyers can make private litigation funding a tricky proposition in the United States.  As a result, private law firms have the financial means of funding litigation (either on their own or by associating with other firms) and are driven to pursue litigation without the need for financing through the promise of a percentage of the recovery if the case is successful.

The Impact of Morrison and Kiobel

The United States Supreme Court has issued two key recent decisions limiting foreign litigants’ access to the US Courts as a forum for pursuing class actions.  Limitations on access to the class action procedures available in the US courts may lead foreign litigants to experiment more frequently with alternatives  in foreign jurisdictions.  Whether the Facebook class action in Austria is part of a trend in this direction remains to be seen.

What Drives Claims for Collective Redress?

In the United States, the promise of a large contingent fee can incentivize an entrepreneurial lawyer with a creative legal theory to pursue class action litigation even in the absence of widespread public awareness of a perceived wrong.  The procedural and financial barriers to pursuing claims for collective redress largely prevent this phenomenon from occurring outside the United States, Canada, and a few other jurisdictions.  Instead, “class actions” can be pursued as a practical matter only when there is enough public outrage or concern over a particular event or business practice that large numbers of individuals are willing to take the time to participate (or when there is a sufficient number of institutional plaintiffs with the financial resources and incentive to pursue the suit, such as in certain securities fraud and competition/antitrust cases).  This means that both mainstream media and–somewhat ironically in the case of Facebook–social media have a necessary role in the success or failure of collective litigation abroad.

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After years of debate, France has finally passed its first “class action” law. Act No. 2014-344 of 17 March 2014 (relatif à la Consommation) went into effect on March 18. Chapter One of the new law introduces a new collective action procedure to adjudicate claims arising out of anti-competitive behavior and certain other consumer protection claims. Like the group action laws of many other civil law countries in Europe, the new procedure is very different from consumer class actions as they are known in the United States and other common law countries. The law creates a simplified opt-in collective action procedure that can only be enforced by an approved consumer association, not by individual litigants.  However, it is a significant development for a jurisdiction that has long resisted implementing collective action procedures of any kind.

Here is a link to the google translation of the Act in English.

Thanks to friend of ClassActionBlawg Larissa Clare Pochmann da Silva for tipping us off to this new development.

For a more detailed summary of the various aspects of the new law, see this Lexology article authored by Jérôme Philippe, Maria Trabucchi, Stephane Benouville, Dimitri Lecat and Alexandra Szekely of Freshfields Bruckhaus Deringer LLP.

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In recent years, academics outside of the United States have made some of the most valuable contributions to the development of legal theory of class actions and other collective litigation.  Here are two examples of recent works by thought leaders in this area:

INDIVIDUAL STANDING IN CLASS ACTIONS (A LEGITIMIDADE DO INDIVÍDUO NAS AÇÕES COLETIVAS)

Author: Larissa Clare Pochmann da Silva (Master in Law in UNESA, Doctorate in Law student at UNESA and Professor of Complex Litigation and Civil Procedure at UCAM – Rio de Janeiro, Brazil)

Abstract (translated from Portuguese):

Individual Standing in Class Actions offers an important and interesting approach to the question of standing, one of the most important themes relating to the development of Brazilian class actions.

The first part the book summarizes research on foreign law, inquiring into the state of the art of collective protection throughout Latin America (Brazil, Argentina, Chile and Mexico), in the United States and Canada, in the European Union (Germany, France, England and Italy) and in Australia.  Part two offers a comparative analysis of these jurisdictions’ various approaches to standing.

Part three organizes the main objections to representational standing and argues for laws recognizing the standing of individuals to sue in a representative capacity, demonstrating the reasons for its relevance, and the important role to be played by lawyers in class actions.

Finally, the book addresses the question of the participation of the individual from various perspectives, seeking to offer a systematic framework for the standing discussion and proposals for the improvement of collective protection in Brazil.

The result is a work that contributes to the development and strengthening of collective action law in Brazilian and brings a new perspective of modernization and improvement of tools for access to justice and the effectiveness of the process.

Pochmann da Silva’s book is available at http://www.editoragz.com.br/produto.asp?prodId=199.

 

AN ECONOMIC ANALYSIS OF RELIANCE IN MARKET FRAUD AND NEGLIGENT MISREPRESENTATION

Authors: Alon Klement and Yuval Procaccia (Interdisciplinary Center (IDC) Herzliyah - Radzyner School of Law, Israel)

Abstract:

A deeply entrenched principle in the law of fraud and negligent misrepresentation provides that damages can be recovered only upon a showing of reliance. To prevail, plaintiffs must not only establish the mere falsity of a statement, but also show that they had acted upon the statement and sustained injury as a consequence.

Despite the intuitive appeal of this principle, this paper argues that the reliance requirement ought to be abandoned. Harm can be caused by a misrepresentation without reliance, and recovery for such loss should not be barred. When a firm misrepresents an attribute of a product, its price in equilibrium typically rises. The inflated price is an injury caused to all consumers, relying and non-relying alike. A rule restricting recovery to only relying consumers results in inadequate deterrence of the firm, which in turn spurs a host of inefficient effects: it may distort allocative efficiency; encourage investments by firms in the production of fraud; induce investments by consumers in self-protection efforts and in detrimental reliance investments; and prompt competing firms to invest excessively in signaling. Furthermore, it undermines deterrence by erecting a substantial barrier to private enforcement through class actions.

While the discussion focuses on consumer markets, it applies more broadly to other markets and other market structures. We explicitly discuss its extension to security markets, in which the requirement has been famously revoked. While the analysis supports existing policy in the domain of primary security markets, it does not do so in the context of secondary markets.

Klement and Procaccia’s article is available for download at SSRN: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2372922

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Today, the Supreme Court issued its ruling in Genesis Healthcare Corp. v. Symczyk, No. 11–1059, which addresses the practice of “picking off” a named plaintiff in a FLSA collective action by making a full offer of judgment under Rule 68 for the amount of the named plaintiffs’ claim.  In a 5-4 majority opinion authored by Justice Thomas, the Court held that the relation back doctrine does not apply to save the collective action from mootness simply because the named plaintiff also sought relief on behalf of others.  The majority distinguished the case from other decisions applying the relation back doctrine in the Rule 23 context after class certification had been denied, pointing out that a certified class under Rule 23 has an independent legal existence from the named plaintiff.  However, the reasoning of the majority’s decision in Genesis Healthcare Corp. could potentially be applied to support the conclusion that an unaccepted offer of judgment moots even a Rule 23 class action if the offer is accepted or expires prior to a ruling on a motion for class certification one way or the other.

The majority’s decision comes with a major caveat.  The majority declined to address the issue whether a non-accepted offer of judgment actually moots an individual’s claim, despite recognizing a split in the circuits on that issue.  This prompted the following commentary in Justice Kagan’s dissent:

The decision would turn out to be the most one-off of one-offs, explaining only what (the majority thinks) should happen to a proposed collective FLSA action when something that in fact never happens to an individual FLSA claim is errantly thought to have done so. That is the case here, for reasons I’ll describe. Feel free to relegate the majority’s decision to the furthest reaches of your mind: The situation it addresses should never again arise. . . .  [T]he individual claims in such cases will never become moot, and a court will therefore never need to reach the issue the majority resolves. The majority’s decision is fit for nothing: Aside from getting this case wrong, it serves only to address a make-believe problem. 

Whether Justice Kagan’s cheeky prediction turns out to be prophetic will be up to the lower courts, who are left to decide the underlying question of mootness.  In the short-term, there is little doubt that the Genesis Healthcare decision will prompt a rash of offers of judgment in both FLSA cases and class actions.

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According to an article in the Korea JoongAng Daily, a Korean court has issued the first ever judgment in a collective action arising out of a data breach caused by alleged mismanagement of the data, as opposed to intentional conduct.  The Seoul Western District Court’s judgment in favor of 2,882 petitioners against SK Communications was for a total of approximately USD 534,200.   Although the amount may be insignificant by U.S. standards, the judgment reflects a key development in the development of both collective litigation and privacy law abroad.

Postscript: for more on the case, see this story published February 19.

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I’m pleased to announce that the BakerHostetler Class Action Defense Team has just released its 2012 Year-end Review of Class Actions, a joint project with the firm’s Employment Class Actions, Antitrust, and Data Privacy practice teams.  See below for a synopsis of the project.  Click the link above to access a copy of the report itself:

We are pleased to share with you the BakerHostetler 2012 Year-end Review of Class Actions, which offers a summary of some of the key developments in class action litigation during the past year. Class action litigation continues to persist in all areas of civil litigation despite the Supreme Court’s 2011 decisions in AT&T Mobility v. Concepcion and in Wal-Mart Stores, Inc. v. Dukes, which were seen by many commentators as marking the beginning of the end of class actions as we know them. But while the Supreme Court’s 2011 decisions have had a significant impact on class action litigation, they have not brought about its demise and are not likely to do so anytime soon. In the last two years, we’ve seen landmark decisions and the addition of important judicial gloss to those decisions. 2013 will be no different as the Supreme Court is set to weigh in on a series of key cases this spring.

We hope you find this Review a useful tool as you move forward into the new year. This comprehensive analysis of last year’s developments in class action procedure and jurisdiction, as well as developments by subject matter will hopefully provide context and insight as you look ahead to 2013′s expected trends in class action law, including the proliferation of privacy class action litigation and class action litigation relating to the LIBOR rate-fixing scandal.

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Editor’s Note: Many thanks to Larissa Clare Pochmann da Silva, complex litigation professor at Cândido Mendes University in Rio de Janeiro, Brazil, who graciously agreed to provide this valuable update on collective and mass action reforms being considered in Brazil. Not all of the reforms discussed in her article are expected to become law in the immediate future. However, they represent unique and creative potential approaches to common problems in collective redress, which should be of interest to anyone who follows trends in representative and multi-party litigation.

Recent Developments in Collective Process and Mechanisms for Solving Collective Conflicts in Brazil

By Larissa Clare Pochmann da Silva

Class Actions

Collective actions in Brazil are not new. The first legislative enactment occurred with the 1934 Constitution, which provided, in art. 113, no. 38, the popular action. From 1934 until today, the collective procedural law has had, in its history, advances and retreats. The most important laws before 1988 were law 4.717/65, about the popular action, and law 7.347/85, about class actions. The 1988 Constitution increased protection of collective rights in a broad sense the constitutional level. Later, in 2009, Law n. 12.016/2009, repealing previous legislation (Law n. 1533), was enacted to regulate the collective writ of mandamus.

Today, the mechanisms used for collective protection are the popular action, class actions and collective writ of mandamus. Each one has its own mechanisms; however there are several general rules applicable to all of them, and they are discussed generally below.

The collective process aims to protect diffuse, collective and homogeneous rights, all of which have explicit definition in the art. 81 of the Consumer Protection Code:

Article 81 – The defense of the interests and rights of consumers and victims can be exercised either individually or collectively.

§ – Collective defense will be exercised when dealing with:

I – diffuse rights or interests, so understood, for the purposes of this Code, the trans, of indivisible nature, they hold people indeterminate and linked by factual circumstances;

II – collective interests or rights, so understood, for the purposes of this Code, the indivisible nature of trans holds that group, category or class of persons linked to the opposing party or by a legal relationship-based;

III – homogeneous interests or rights, herein defined as arising from a common origin.

Unlike the United States and other common law countries, Brazil doesn’t have a certification process for class actions.

Key Current Issues

Two concepts that today represent the greatest difficulties of the collective process in Brazil are standing and res judicata, but res judicata, since 2011, has become a less controversial issue than standing.

Standing, in the words of Professor Barbosa Moreira, is eclectic. Who has standing? This would be the public sector, associations and individual. Individuals only have standing to propose a popular action. Political parties with representation in Congress, union organization and associations legally established and in operation for at least a year, in the interests of its members or associates (art. 5, LXX of the Federal Constitution), have standing for collective writ. The Public Prosecutor; the Public Defender; Union, states, the Federal District and municipalities; the local authority; public corporation; foundation or mixed capital company and associations, which have existed since at least one year (requirement can be waived by the judge in this case, since the social relevance of observed) and has relevance to the topic, have standing for class actions.

There has been much discussion in recent years about the standing of the public prosecutor to pursue legal action for the protection of homogeneous individual rights. The view that predominates today is the importance of verifying whether the homogenous individual interests identified by the public prosecutor have the essential magnitude capable of characterizing a genuine social interest. If so, the Public Prosecutor will have standing for filing the lawsuit.

However, the issue is still in debate. In the Extraordinary Appeal No. 605,533, the Supreme Court of Brazil (STF) accepted review to decide whether prosecutors have standing to propose measures to protect legal rights related to delivery of medicines to patients with serious illnesses. Depending on the STF’s decision, the case may either be an important development in the history of collective protection or represent a phase of retrocession in the protection of rights.

The standing of the Public Defender is also being debated. The Public Defender’s standing in the legal system generally is governed by Law No. 11.448/2007. The role of the Public Defender in collective protection, however, is pending of decision by the Supreme Court, which must rule on that issue in the Direct Action of Unconstitutionality No. 3943-1. Another question is whether standing of the Public Defender is restricted to cases when the group involves persons who are unable to pay a lawyer to protect their own interests or if the Public Defender can act in every case that involves transindividual interests. The prevailing view is that Public Defender cannot act unless the group involves persons who are unable to pay a lawyer to protect their own interests.

The effects of res judicata are specified in art. 103 of the CDC, the systematic secundum eventus litis. In general, the res judicata effect of a sentence (judgment) is formed erga omnes, in the case of diffuse rights, ultra parts, limited to a group, category or class, in the case of collective rights, and erga omnes in the case of individual homogeneous rights to benefit all victims. The exception is when the claim is dismissed for lack of evidence, in which case any legitimate claimant may bring another action with the same basis drawing on new evidence.

Proposed Reforms

Article 16 of the Class Action Law places territorial limits on the effects of res judicata. However, in October 2011, the Special Court of the Superior Court, in Recurso Especial No. 1,243,887, ruled in that “… the effects and effectiveness of the judgment are not confined to geographic limits, but the objective and subjective limits of what was decided.” (STJ. Recurso Especial nº 1.243.887/PR. Corte Especial. Rel. Min. Luis Felipe Salomão. DJ 19/10/2011).

One of the challenges in analyzing the collective process in Brazil is the difficulty of finding accurate data and national level on the collective process. The National Register for Class Actions and for Class Action Investigation, proposed by Resolution No. 2, June 21, 2011, and originally expected to be in force beginning December 2011, so far not been implemented. It is estimated that the National Register will finally enter into force in the second half of this year.

Nowadays, each court has its own system of search, which provides the data processing procedures in the court determined that the search engines have different search parameters, i.e., some courts make the details of the processes by name only the defendant, others only provide process data by reporter, other process per year, which makes an overview of information difficult in national terms.

There are bills to bring improvements to the collective protection, but it’s still hard to think that the changes will occur anytime soon.

A bill for a new law on class actions and the proposed legislative amendment to the Code of Consumer Protection, Draft Law No. 5.139/09, aims to replace Law No. 7.347/85. The Draft Law has had a long course and numerous changes in its text. In general, the project aimed, among other modifications, (a) to substantially reduce judicial activism, restoring the prevalence of the initiative of the parties, (b) to adopt the principle of dynamic evidentiary burden by assigning the responsibility of proving a fact to the party better able to accomplish it, and (c) to emphasize the public prosecutor’s power to conduct a civil investigation preliminary to the class action.

The project also provided for the creation of the Register of Class Actions, mentioned above, and would confer standing to the public prosecutor without any restriction on the defense of individual homogeneous rights, which today is still a controversial point in the collective process of Brazil.

The project sought to clearly express the role of associative entities. Art. 6 would convey standing to the Brazilian Bar Association (including its sections only–subsections were removed from the legal text for a suggested amendment), unions, and associates formed for the purpose of monitoring the exercise of professions (restricted by the interests linked to their category), the political parties with representation in Congress, in the Legislative Assemblies or Municipal Chambers, and civil associations and foundations under private law legally constituted for at least one year, for the defense of rights related to their institutional objectives. According the art. 6 § 1, the requirement that civil associations and foundations must have been constituted for at least may be waived at the judge’s discretion with consent of the committee and the submission of nominal roll of members.

On March 17, 2010, the draft resolution was rejected by the Constitution and Justice Commission of the Chamber of Congressman in a vote by a majority of 17 votes to 14, the ground of lack of debate and public discussion. On March 23, 2010, members of the committee of lawyers responsible for drafting the project appealed against the dismissal. A new opinion in favor of approving the project was issued on April 27, 2010. However, a few days later, the project was declared suspended unless another appeal should be filed. A second appeal was filed later that year.

No decision has been made on the appeal, and so it remains uncertain whether the bill will be transformed into law, which would represent another major step for Brazilian collective protection, or be permanently archived, burying important ideas for themselves the effectiveness of collective protection.

In 2011, there was a proposal to amend the Consumer’s Protection Code, the project PLS 282/12. The proposal does away with one of these controversial points regarding standing, dismissing any discussion on the standing of the prosecutor to the defense of individual rights homogeneous, stating that these rights, by their nature, already have social relevance. The project also dismisses the discussion about the Public Defender: the Public Defenders can act in all the cases of transindividual rights, not only when there is a group that couldn’t pay for a lawyer. Another proposal would widen participation in public actions through the filing of amicus curiae submissions. However, there is, so far, no indication on the adoption of these proposals.

Thus, despite the existence of bills to improve the previsions on collective protection, there aren`t prospects for approval soon. The only reform that is likely to occur this year is the implementation of the National Register for Class Actions and for Class Action Investigation. On the other hand, as we will explain, the mass torts are to gain a new instrument in the near future.

Mass Torts

A mechanism known today in conflict resolution for mass torts in the country is the so called recurso repetitivo (repetitive appeals). It has existed in the law since 2008, when Law No. 11,672 included items 543-543-B and C of the Code of Civil Procedure. The amendment states that when there are multiple claims requiring resolution of an identical point of law, the President of the court of origin may admit one or more representative features of the dispute and refer them to the Supreme Court (543-B of the Civil Procedure Code) or to the STJ ( 543-C of the Civil Procedure Code). The other cases are to be suspended until the final pronouncement of the Court in the representative appeal. The grouping of recursos repetitivos will take in consideration only the essential issue in discussion whenever resolution of that issue can reduce the analysis of other issues in the same plea.

The Court justice in charge of reporting the case may request information, which must be provided within 15 days to state or federal courts concerning the dispute. After receiving the information, and after the demonstration of third parties, if appropriate, the case will be referred to the Public Prosecutor will for a period of 15 days. After the deadline for Public Prosecutors, the process will be placed on the agenda of the section or the Special Court, which must be judged with preference over other cases, except criminal cases and requests by accused of habeas corpus.

After a final decision, the judgment is to be published. Any identical issues in the stayed cases are to be decided based on the judgment of the Superior Court, and any unique issues remaining in the other cases pending in the court of will be re-examined by the Court of origin in the case.

Another procedure to resolve claims massed, but in the court of first instance, is a “preliminary ruling”. When the matter at issue is solely of law and judgment has already been pronounced in other similar cases, the judge can enter the same ruling in the case without notifying the defendant. In spite of the criticisms on this provision, it is important to note that it only applies to issues of law.

There are other legal instruments that aim to reach the speed of the procedure in mass tort cases, but one in particular worth mentioning is an instrument that it likely to join the legal system very soon, when it approved the Project for the New Civil Procedure Code.

Proposed Reform: Incidente de resolução de demandas repetitivas

The design of the new Civil Procedure Code was presented to the Senate President on August 6, 2010 and as of July 2012, after passing the Senate, already proceeding through the house, was in the process of public hearings. One of its innovations is the incidente de resolução de demandas repetitivas (incident for solving repetitive pleas, or “Incident”), inspired by the second version of the German Musterverfahren, but with many peculiarities.

The mechanism is found under Chapter VII of Project of the New Civil Procedure Code, Articles 930 to 941, in the title “Of Processes in the Courts,” which is not just about appeal, but all the processes that proceed through the courts. It exemplifies one of the concerns of the project: a uniform jurisprudence of the courts, trying to avoid conflicting decisions.

The Incident will take place in case of dispute that may generate significant multiplication of processes based on an identical question of law and cause serious legal uncertainty due to the risk of conflicting decisions. The mechanism will only work for identical issues of law not being applied to questions of fact. One of the practical challenges in implementing the new rule will be the difficulty of decoupling the issues of law of the facts. In fact, law and fact are associated, and it is often difficult in practice to make a clear distinction between the two.

The parties with standing to raise the new Incident procedure, which can be done ex officio by the court, are the parties and the public prosecutor, through simple petition, although the prosecutor must intervene to do so. Incidents raised will be recorded in the National Council of Justice.

The judge to whom the Incident is raised (the rapporteur) may inquire of the lower court which handled the process originally, and the information should be provided within 15 days. After the information is provided, the court of appeal will evaluate the request, and if the use of the Incident is approved, all cases that deal with the same question of law in the court of appeal jurisdiction area will be suspended until a ruling on the common legal question. The time period in which other cases are suspended is limited to six months as a rule, but the period can be extended by the rapporteur of the Incident.

The design of the new code specifically provides for the investigation and resolution of a single case to be admitted as a paradigm of the controversy. The code does not specify whether the Incident is to be considered a representative process, an individual process, or a collective process. In any event, all individual actions may be suspended the same as in a collective action if they are not chosen as representative of the dispute process.

Interested parties may participate in the controversy, joined by the request for documents or conducting investigations. They will have fifteen days to present documents and explain the controversy in 15 days, as well as the Public Prosecutor.

In the trial day, all interested parties are limited to a total of 30 minutes of presentation time to the court. This can be a very small amount of time per interested party, depending on the number who seek to appear. Thus, as a practical matter, although the Incident process is described as participatory, stakeholders have a limited practical ability to manifest themselves in the process. Instead, all cases are decided based on a paradigm.

There is a possibility of appeal to the Superior Court (STJ), or in extraordinary cases, to the Supreme Court (STF), from the court of origin where the Incident was approved. The appeal can be brought by any person who is party to ongoing process which discusses the same legal situation.

After the judgment of the Incident, the bill states that a party may file a complaint in the court that issued the judgment is another court disregards the theory adopted in the Incident.

This was just a brief overview of the new Incident procedure, which is expected to be integrated into Brazilian law in the very near future. However, the bill for a new civil procedure code is still in process, and there are a large number of projects of new bills and new codes in analysis in Brazil, so changes can happen at any time.

So, stay tuned!

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