STF redefines the criteria for granting fee waiver

In summary

In ruling on ADC 80, the Federal Supreme Court (STF), by 9 votes to 2, redefined the criteria for granting justiça gratuita, with a direct impact on labor litigation. The Court declared unconstitutional the threshold of 40% of the RGPS ceiling (Article 790, paragraph 3, of the CLT) and Superior Labor Court (TST) Precedent 463, Item I, and began requiring effective proof of insufficient resources from those seeking the benefit. Companies acting as defendants in labor claims should observe the new framework, which applies, with ex nunc effects, to claims filed from the publication of the minutes of the judgment.

Key takeaways

• New income threshold: insufficient resources are rebuttably presumed for those earning a salary equal to or lower than BRL 5,000.00, an amount to be adjusted by income tax legislation or, in its absence, by the IPCA.
• End of the simple declaration: a mere declaration of financial hardship by an individual is no longer sufficient for employees earning more than BRL 5,000.00.
• Burden of proof on the applicant: the applicant is responsible for demonstrating their income or financial insufficiency, and the judge may require additional documentation. For those earning more than BRL 5,000.00, concrete proof is indispensable.
• The presumption is not absolute: even below the threshold, the benefit may be denied when the individual’s assets or family income are incompatible with the alleged insufficiency.
• Opportunity for defense: companies now have stronger grounds to challenge requests for fee waivers and to argue that claimants should be held liable for court costs, litigation expenses, and prevailing-party attorneys’ fees.

Further details

The STF concluded the judgment of ADC 80 and standardized the criteria for granting fee waiver. Gilmar Mendes’s opinion prevailed, with additions from Cristiano Zanin and Flávio Dino; Edson Fachin and Cármen Lúcia dissented.

The ruling will have ex nunc effects and will therefore apply only to proceedings filed on or after publication of the minutes of the judgment.

Finally, attention should be given to the wording of the prevailing opinion, which states that the rebuttable presumption of insufficient financial resources applies to individuals who “currently earn a salary of BRL 5,000.00 or less.” This language suggests that the relevant income should be assessed when the lawsuit is filed, although this issue remains subject to further interpretation and clarification by the courts.

Official source: Federal Supreme Court — ADC 80 (portal.stf.jus.br).