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Decision on ADIN # 5766, Supreme Court rules that payment of attorney’s fees are not due when plaintiffs proceed in forma pauperis

21/10/2021

In brief 

The Supreme Court ruled the direct action for the declaration of unconstitutionality (“ADIN”) # 5766, involving payment of attorney’s fees in the event free access to justice is granted. We understand that this decision may affect the intention of former employees who were afraid to file labor claims and, thus, be sentenced in payment of fees, which is why our perspective is that there will be an increase in the filing of labor claims.

More details

Yesterday, October 20, 2021, the Supreme Court (“STF”) ruled the direct action for the declaration of unconstitutionality (“ADIN”) # 5766, filed by the General District Attorney in charge in the past, Rodrigo Janot, who, in summary, argued the unconstitutionality of articles 790-B, 791-A and 844 of the Labor Code (“CLT”) that determined the payment (i) of expert and attorney fees by the beneficiary of free access to justice and (ii) court costs by a beneficiary of free access to justice who is not present at the initial hearing.

These were considered some of the main points brought by the 2017 Labor Reform, as there was the allegation that such provision prevented access to the Labor Court by employees considered to be low-sufficient.

In yesterday’s judgment, after a long debate on the matter, by majority of the plenary, the request made in the aforementioned ADIN was partially accepted, and articles 790-B, and § 4, and 791-A, § 4 of the CLT – on the responsibility of payment by the loosing party of expert and attorney fees were ruled unconstitutional. However, the claim to consider unconstitutional the provision of 844, §2 of the CLT, that imposes the payment of court costs by the party who unjustifiably is not present at the initial hearing, was considered groundless.

We understand that this decision may encourage former employees to file labor claims, as they will no longer be sentenced to payment of attorney fees in case the claims are considered groundless. Since the Labor Reform was enacted, there has been a decrease in claims filed precisely because workers were afraid of incurring additional costs in case the claims are refused by Courts.

Thus, the expectation is that there will be a substantial increase in the filing of labor claims.

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