Brazil: Product Liability

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This country-specific Q&A provides an overview to product liability laws and regulations that may occur in Brazil.

This Q&A is part of the global guide to product liability. For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/practice-areas/product-liability/

  1. Please summarise the main legal bases for product liability

    The main legal bases for product liability are (i) existence of a defective product insert in the market; (ii) a damage caused to the consumer; and (iii) the connection between the defective product and the damage caused.

  2. What are the main elements which a claimant must prove to succeed in a strict liability type claim for damage caused by a defective product?

    The claimant must prove the damages suffered by a defective product. Moreover, the claimant is also entitled to prove the connection line between the defective product and the damage suffered.

  3. With whom does liability sit? If there is more than one entity liable, is liability joint and several?

    According to the Consumer Protection Code, a product liability matter is not necessarily restricted to a single entity. It embraces all the members of the supply chain. If there is more than one company in the supply chain, all of them will be severally and jointly liable for the damages caused by the defective product.

  4. Are any defences available? If so, please summarise them.

    When the lawsuit is filed, the judge must summon the defendant to present a defence, which will be the first opportunity to explain the reasons why the lawsuit should be ruled groundless.

    In such opportunity, the defendant should prove it is not liable for the damage claimed. In order to do so, it must prove (i) the in existence of the defect; (ii) the defendant did not insert the product in the market; or (iii) exclusive fault of the consumer or a third party.

  5. What is the limitation period for bringing a claim?

    If the claim involves risks to health and/or security of the consumers, it should be brought within 5 (five) years, counted from the acknowledgement of the damage and the acknowledgment of the identity of the offender.

    If, however, the claim does not involve risks to health/security of the consumers, the Brazilian law establishes different rules.

    Regarding non-durable products, in case of easily identifiable flaws, the lawsuit should be brought in 30 days from the delivery of the product. If it involves hidden flaws, the 30-day period should be counted from the identification of the flaw.

    Regarding durable-products, the same rules concerning easy identifiable/hidden flaws are applied. The only particular difference is that instead of a 30-day period, the consumer will be entitled to bring the lawsuit in a 90-day period.

  6. To what extent can liability be excluded (if at all)?

    First of all, it should be stressed that the supplier has strict liability, which means that the element “guilt” is not relevant during the analysis of the existence of liability.

    According to the Consumer Protection Code, the supplier will not be held liable if it is able to prove that:

    (i) the product was not put into the market;

    (ii) although the product was put into the market, the product does not present any flaws;

    (iii) exclusive fault of the consumer or a third party.

  7. What are the main elements which a claimant must prove to succeed in a non-contractual (eg tort) claim for damage caused by a defective product?

    To succeed in a non-contractual claim, the Claimant should prove that: (i) he suffered damages, and; (ii) such damages were related to the product.

  8. What types of damage/loss can be compensated and what is the measure of damages? Are punitive damages available?

    The Brazilian law admits the compensation of material and moral damages. The material damages encompass everything that the consumer effectively lost plus everything that he was prevented from profiting. Such losses are measurable.

    The moral damages, on the other hand, can be defined as psychological damages caused to the consumer. Due to its abstract nature, it cannot be monetarily measured. The judges commonly use other decisions previously rendered in similar cases to establish the parameters of the moral damages.

    Punitive damages are not established in the Brazilian law, since our civil liability system is based in the concept that the victim shall be indemnified to the extent of the damages suffered, and shall not be cause of unlawful enrichment. Nonetheless one of the elements used by judges to fix the indemnification of moral damages is the pedagogical, which increases the amount of the condemnation.

  9. How are multiple tortfeasors dealt with? Is liability joint and several? Can contribution proceedings be brought?

    Considering the idea that the entire supply chain is liable for the defect, there can surely be more than one tortfeasor. In this case, all of them with be treated equally and will be granted the same rights.

    Moreover, the Consumer Protection Code establishes that the suppliers are severally and jointly liable for the defect. It means that the consumer can choose between suing an isolated supplier or all of the suppliers jointly, according to its preference.

    The suppliers can file separate defences or a single defence. All the defences’ arguments are valid for all the defendants, if applicable.

  10. Are any defences available? If so, please summarise them.

    When the lawsuit is filed, the judge must summon the defendant to present a defence, which will be the first opportunity to explain the reasons why the lawsuit should be ruled groundless.

    In such opportunity, the defendant should prove it is not liable for the damage. In order to do so, it must prove (i) the in existence of the defect; (ii) the defendant did not insert the product in the market; or (iii) exclusive fault of the consumer or a third party.

  11. What is the limitation period for bringing a claim?

    If the claim involves risks to health and/or security of the consumers, it should be brought within 5 (five) years, counted from the acknowledgement of the damage and the acknowledgment of the identity of the offender.

    If, however, the claim does not involve risks to health/security of the consumers, the Brazilian law establishes different rules.

    Regarding non-durable products, in case of easily identifiable flaws, the lawsuit should be brought in 30 days from the delivery of the product. If it involves hidden flaws, the 30-day period should be counted from the identification of the flaw.

    Regarding durable-products, the same rules concerning easy identifiable/hidden flaws are applied. The only particular difference is that instead of a 30-day period, the consumer will be entitled to bring the lawsuit in a 90-day period.

  12. To what extent can liability be excluded (if at all)?

    According to the Consumer Protection Code, the supplier will not be held liable if it is able to prove that:

    (i) the product was not put into the market;

    (ii) although the product was put into the market, the product does not present any flaws;

    (iii) exclusive fault of the consumer or a third party.

  13. Does the law imply any terms into B2B or B2C contracts which could impose liability in a situation where a product has caused damage? If so, please summarise.

    As long as the commercial contracts signed between companies (B2B) is not governed by the Consumer Protection Code, they are allowed to established clauses to determine liabilities and its limitation. But this kind of provisions will not be enforced against the consumers.

    According to the Consumer Protection Code, the consumer is the weak party of the relationship and law grants full protection to them, especially in the product liability cases. The liability is established by the law, which determines that the supplier possesses strict liability before consumers and third parties affected by the defective product. Any provisions that would try to mitigate that will be consider null and void.

  14. What types of damage/loss can be compensated and what is the measure of damages?

    The Brazilian law admits the compensation of material and moral damages. The material damages encompass everything that the consumer effectively lost plus everything that he was prevented from profiting. Such losses are measurable.

    The moral damages, on the other hand, can be defined as psychological damages caused to the consumer. Due to its abstract nature, it cannot be monetarily measured. The judges commonly use other decisions previously rendered in similar cases to establish the parameters of the moral damages.

    Punitive damages are not established in the Brazilian law, since our civil liability system is based in the concept that the victim shall be indemnified to the extent of the damages suffered, and shall not be cause of unlawful enrichment. Nonetheless one of the elements used by judges to fix the indemnification of moral damages is the pedagogical, which increases the amount of the condemnation.

  15. To what extent can liability be excluded (if at all)?

    According to the Consumer Protection Code, the supplier will not be held liable if it is able to prove that:

    (i) the product was not put into the market;

    (ii) although the product was put into the market, the product does not present any flaws;

    (iii) exclusive fault of the consumer or a third party.

    The supplier should use such prerogatives guaranteed by the law to prove that the agreement was fully obeyed and, therefore, no liability is applicable.

  16. Are there any recent key court judgements which have had a significant impact on the approach to product liability?

    Yes. There are two decisions rendered by the Brazilian Superior Court of Justice (“STJ”) that can be mentioned. The first important decision refused an agreement entered into by the plaintiff and defendant in a class action (filed to discuss consumer matters) and allowed the Public Prosecutor Office – that was not part of the lawsuit but was interested in conducting it- to replace the plaintiff and keep the lawsuit ongoing (Special Appeal No. 1.656.874).

    The second decision is related to the institute of the “fluid recovery” and allowed the Public Prosecutor Office, during a class action, to persecute to a public fund the indemnification amounts due to consumers that did show interest in receiving them in a timely manner (Special Appeal No. 1.599.142).

  17. What are the initial litigation related steps you should take if you are facing a product liability claim or threatened claim?

    The first step consists in understanding if the product effectively presents a flaw. The supplier must obtain all technical information regarding the defect and evaluate (i) if it is able to cause damages to the consumers; and (ii) if so, to what extent.

    The next step consists in working in a strong defence line capable of showing the inexistence of supplier’s liability.

    In parallel, if the product presents risks to consumers’ health and/or security, based on the provisions of the Consumer Protection Code, we would recommend the client to immediately communicate the authorities and start a recall campaign in order to remove the product from the market.

  18. Are the courts adept at handling complex product liability claims? Are cases heard by a judge or jury?

    Yes, the courts are adept at handling complex product liability claims. The cases are always heard by a judge. The only cases analysed by a jury in Brazil consist of crimes against a victim’s life intentionally committed.

  19. Is it possible to bring a product liability related group action? If so, please summarise the types of procedure(s) available

    Yes. The consumers affected by the defect can either reunite and file a single lawsuit together or they can resort to some authorities entitled to promote the consumers’ defence (such as Public Prosecutor Office, Union States, Municipalities, associations, etc.) to file a class action on their behalf.

  20. How are cases typically funded? Can lawyers charge success fees? Is third party funding permissible?

    In Brazil, it is not expensive to bring a product-liability lawsuit. In view of that, most of the consumers file the lawsuits at their expenses. However, if a consumer does not have financial resources to bring the lawsuit, he can request the “free justice” benefit, which exempts him from paying court fees.

    Moreover, the Brazilian law enables the lawyers to charge success fees. It is just necessary to include a clause in the agreement to be entered into with the client establishing the payment of such fees in case of a favourable result.

    With regard to the third-party funding, it is also not prohibited.

  21. How common are product liability claims and what factors influence their frequency?

    Since the enforcement of the Consumer Protection Code (in the 90’s), product liability claims have become very common in Brazil. The range of such claims depends on (i) the involvement of the product in an incident and (ii) the quantity of defective products put in the market. For instance, mass defective products tend to increase the number of lawsuits filed against the supplier.

  22. What are the likely future developments in product liability law and practice? To what extent is the suitability of the law being challenged by advances in technology?

    The first likely future development consists in the use of artificial technology to increase the number of product-liability lawsuits, especially considering that the particularities between the cases may be similar in several cases.

    Considering that the Consumer Protection Code is a principle law and it is relatively new law (in force since the 90’s) it has duly responded to the advances in technology. However, depending on the modifications brought by the technology and its impacts in the product liability matters, the law will have to be modified.