Brazil

On 18 September 2025, Fábio Medina Osório will take part in the First Seminar on Administrative Sanctioning Law, organised by the Higher School of the Office of the Attorney General of the Union (ESAGU), in Brasília/DF. The event will also be broadcast live on ESAGU’s official YouTube channel. The programme will feature leading authorities and experts, with Medina Osório contributing at two key moments: Opening Session | 9:00 – 9:30 Opening Lecture | 10:15 – 11:15 Theme: “Constitutional Principles of Administrative Sanctioning Law” The seminar, convened by ESAGU, will bring together jurists and members of the Public Advocacy to discuss the foundations, principles and contemporary challenges of Administrative Sanctioning Law. Medina Osório expresses his gratitude to the Attorney General of the Union, Minister Jorge Messias, and to the Director of ESAGU, João Carlos Souto, for the invitation to speak. He also commends them for organising a seminar of such strategic importance for the advancement of this field in Brazil. Event Details: Date: 18 September 2025, 9:00 – 18:00 Venue: Auditorium of the Higher School of the AGU, Brasília/DF Live Broadcast: ESAGU YouTube Channel – www.youtube.com/watch?v=6dyNXXpYGyY

KEYWORDS/SCOPE Shifting of the burden of proof, Brazilian judiciary, Civil procedure, Consumer Protection Code. SUMMARY The shifting of the burden of proof presents challenges to the defense and underscores the importance of legal strategies in Brazil. TEXT Foreign companies operating in Brazil must adapt not only to commercial and cultural differences, but also to the unique features of the local legal system. One such feature is the possibility of shifting the burden of proof - a legal mechanism that can significantly affect how companies should prepare to handle litigation in the country. This procedural dynamic is an exception to the traditional rule that each party must prove the facts it alleges, allowing, in certain situations, the defendant to be required to demonstrate the nonexistence of facts alleged against them. In Brazilian civil procedure, the general rule for the allocation of the burden of proof is set forth in Article 373 of the Code of Civil Procedure (CPC), which establishes that the plaintiff must prove the facts constituting their right, while the defendant is responsible for proving facts that prevent, modify, or extinguish the plaintiff’s right. However, this allocation can be modified by legal provision or by judicial decision, based on the principles of procedural effectiveness and access to justice. The most notable example of a legal provision for the shifting of the burden of proof is found in Article 6, item VIII, of the Consumer Protection Code (CDC). According to this provision, the judge may shift the burden of proof in favor of the consumer when the consumer’s allegations are plausible or when the consumer is at a disadvantage, whether technical, informational, or economic. In practice, this means that, when faced with a reasonable and plausible allegation by the consumer, the supplier may be required to demonstrate, for example, that the product was not defective, that the service was properly provided, or that the information given was clear and sufficient. Although the shifting of the burden of proof under the CDC depends on a reasoned judicial decision, Brazilian case law has shown a strong tendency to apply this mechanism broadly, in order to ensure consumer rights, as consumers are recognized as the vulnerable party in consumer relations. This creates a scenario in which companies must act preventively and strategically, considering that they may be required to produce evidence that, in other legal systems, would be the sole responsibility of the plaintiff. The Code of Civil Procedure, in turn, extends the scope of the shifting of the burden of proof beyond consumer relations. In Article 373, paragraph 1, the CPC provides that the judge may reallocate the burden of proof in cases where producing evidence would be excessively difficult for one party or when the other party is in a better position to produce it. This possibility, although dependent on a request by the parties and governed by the principle of adversarial proceedings, allows the judiciary to adapt the traditional structure of evidentiary allocation in pursuit of substantive justice in the specific case. For companies operating in Brazil, this characteristic of the procedural system is a significant point of attention. The shifting of the burden of proof can result in additional costs, both in the pre-litigation phase and during the course of judicial proceedings, and represents a concrete risk of an adverse judgment in cases where there is insufficient documentary evidence to refute the opposing party’s allegations. In disputes involving consumers, for example, it is common for the company to have to prove that it provided clear and adequate information, that there was no failure in product delivery, or that billing was correctly performed. The absence of evidence or disorganized documentation may lead to a judicial presumption of the company’s liability. For this reason, foreign companies operating in Brazil should adopt strict internal policies for recording interactions with customers, maintain effective systems for tracking products and services, invest in the formalization of contracts and terms of use, and train their legal and operational teams to handle litigation involving the shifting of the burden of proof. Prevention and organization are essential to mitigate risks and avoid losses resulting from an unfavorable allocation of the burden of proof. In summary, the shifting of the burden of proof in the Brazilian judiciary is a tool designed to promote procedural balance and effectiveness in judicial proceedings, but at the same time, it imposes concrete obligations and challenges on companies operating in the country. Understanding this mechanism and preparing accordingly is essential to ensure legal certainty, reduce contingencies, and protect the reputation and sustainability of business operations in Brazil. AUTHORS Raissa Simenes Martins – Partner (Corporate Litigation & Dispute Resolution) Ana Lígia Alves F. Fantinato – Coordinator (Corporate Litigation & Dispute Resolution) Luiza Pattero Foffano – Senior Associate (Corporate Litigation & Dispute Resolution) Isadora Proença Cruz – Intern (Corporate Litigation & Dispute Resolution)

Keywords: [secondary debtor; labor enforcement; Brazilian labor courts; labor liability; service provision; service contractor; TST;] Summary: Brazil’s Superior Labor Court now allows enforcement directly against subsidiary debtors once the main employer defaults, heightening companies’ financial exposure and demanding stricter oversight of third-party contractors. Text: In a recent virtual full-bench session, the TST reaffirmed 17 legal theses, transforming them into binding precedents in accordance with Article 896-C, paragraph 1 of Brazil’s Labor Code (CLT). This mechanism, enhanced by Internal Rule Amendment No. 7/2024, aims to standardize national case law and streamline proceedings on matters already consistently settled by the Court’s Panels and the Specialized Individual Disputes Section (SDI-1). Among the topics addressed was the enforcement of judgments against secondary debtors. The precedent was established in the judgment of Case No. RR 247-93.2021.5.09.0672 and reads as follows: “Labor enforcement may be redirected to the subsidiary debtor upon confirmation of default by the principal debtor, without the need to first exhaust attempts to collect from the primary employer or its shareholders.” This binding formulation now applies to all Brazilian labor courts and has significant implications for companies that outsource services. Specifically, it eliminates the requirement to first attempt collection from the primary debtor before pursuing enforcement against the company held secondarily liable. Broader Impact on Service Contracting Companies This new precedent reinforces an interpretation that has already prevailed within the TST, particularly after the cancellation of the former Precedent No. 12, which had previously required prior attempts at enforcement against the primary employer. The new understanding prioritizes the efficiency of labor enforcement by allowing immediate redirection to the secondary debtor — even in cases of partial default. While this is not a doctrinal innovation, the new binding nature of the rule drastically alters its legal force and imposes a stricter procedural obligation on lower courts. Judges at the trial and appellate levels are now required to apply this thesis without exception, barring extremely rare and well-justified circumstances. From a corporate perspective, the precedent requires companies to reassess the risks involved in outsourcing. Given that mere nonpayment by the service provider can now trigger direct enforcement against the contractor, the financial liability of companies — particularly those engaging with small or undercapitalized service providers—becomes more acute. Practically speaking, this removes from the secondary debtor the ability to challenge the order of liability during enforcement. Defense strategies must now focus on well-established arguments, such as the lack of fault in monitoring the service contract (when applicable) or procedural nullities in the earlier litigation phase. Strategic and Preventive Measures for Companies In light of the new binding precedent, companies must take a more proactive approach to managing labor risk in third-party engagements. Essential steps include: Strengthening third-party due diligence, including tighter selection, monitoring, and auditing procedures; Maintaining up-to-date documentation that proves the labor and contractual compliance of service providers; Drafting more robust contractual clauses, clearly allocating risks and obligations for cost reimbursement; Pursuing timely indemnification claims when early enforcement leads to financial loss. A Shift Toward Enforcement Efficiency in Labor Law The formal adoption of the thesis in RR 247-93.2021.5.09.0672 underscores a broader institutional trend: strengthening the effectiveness of labor enforcement at the expense of some traditional creditor protections found in civil law. For corporate counsel, this means adopting an even more preventive and strategic posture. While case law standardization may enhance legal predictability, it does not eliminate risk; rather, it calls for careful legal planning and proactive governance. In this new environment, companies must closely monitor outsourced contracts and act decisively during the early litigation phase to reduce the chance of being held financially liable. Finally, the procedural innovation introduced through Internal Rule Amendment No. 7/2024 — and the use of virtual sessions for jurisprudential reaffirmation — highlights the TST’s commitment to procedural modernization and consistent case law. However, it also signals the urgent need for companies to adapt their contractual and litigation strategies to avoid unnecessary liabilities. Veridiana Moreira Police – Partner (Labor, Employment and Social Security) Brunna Louise Spedro Arantes - Senior Associate (Labor, Employment and Social Security)

Introduction The Economic Crime and Corporate Transparency Act 2023 (“ECCTA 2023” or the “Act”) constitutes a landmark development in the United Kingdom’s (“UK”) legal framework to combat financial crime and reinforce corporate accountability. Enacted in 2023, the Act introduces two key provisions: the creation of the new corporate offense of failure to prevent fraud, entered into force in September 1st, 2025, and the expansion of the identification doctrine through the senior manager regime, entered into force in December 26, 2023. These new provisions are expected to generate significant challenges for companies both within and outside the UK, as the scope of exposure is broad with potential extraterritorial implications - such as organizations incorporated in the UK and multinationals with UK operations. In this regard, the most effective way to address these challenges is to implement or enhance compliance programs to prevent fraud and ensure appropriate oversight of senior management. This article aims to present the key challenges posed by these new provisions and highlight practical measures that companies should adopt to mitigate them. An essential component of this approach is the periodic review of compliance programs, ensuring that they remain tailored to the company’s risks, regulatory requirements and corporate structures. Preliminary considerations The United Kingdom has progressively reinforced its legal framework to address economic crimes and enhance corporate accountability. A key milestone was the UK Bribery Act of 2010 (“UKBA”), which introduced the pioneering corporate offense of failure to prevent bribery. Under this strict liability regime, organizations may be held criminally liable for bribery committed by an associated person intending to benefit the organization, unless them can demonstrate that adequate procedures had been implemented to prevent such conduct. The ECCTA 2023 represents an evolution. It complements and expands the UKBA by introducing the failure to prevent fraud offense, applicable to large organizations - defined as those meeting at least two of the following criteria: (i) more than 250 employees, (ii) annual turnover exceeding £36 million, or (iii) total assets exceeding £18 million. In addition, the Act expands the identification doctrine, enabling corporate liability for offenses committed by senior managers acting within the scope of their authority, even if they do not hold formal executive titles. Taken together, the UKBA and ECCTA 2023 establish a robust legal framework that shifts the burden onto organizations to proactively prevent misconduct, rather than merely responding to it. This evolution underscores the UK’s enduring commitment to enhancing transparency, accountability, and ethical conduct in corporate environments. As mentioned before, the Act contains provisions with extraterritorial effects. Companies inside and outside the UK may still fall within the scope of ECCTA 2023 if they have relevant UK connections, such as UK-based customers, operations, or assets. Under the senior managers regime and failure to prevent fraud offense, liability may arise regardless of incorporation or location, provided that there is a demonstrable UK nexus. Hence, these companies have an ongoing obligation to continuously monitor and periodically review the effectiveness of their compliance programs. Periodic compliance review as a strategic response Companies subject to the ECCTA 2023 - as well as those operating under other robust anti-corruption frameworks - should carry out periodic reviews of their compliance programs. Such reviews are critical not only to confirm that existing procedures remain adequate, but also to ensure that the program evolve in response to shifting regulatory expectations and emerging risks. The absence of this continuous reassessment exposes organizations to heightened liability, particularly in jurisdictions that demand demonstrable and proactive compliance efforts, as the UK. A compliance review is a structured and in-depth evaluation of a company’s compliance framework. It usually includes a thorough document review, which includes compliance-related policies and internal procedures, training materials and sessions provided, sample analysis of relevant third parties to check whether the appropriate procedures are being carried out. In addition, one effective tool during the review is to perform a general compliance perception assessment, involving structured interviews with key personnel to capture insights on the program’s effectiveness. The findings can then be used to identify and address specific opportunities for improvement, ensuring that the compliance framework remains both responsive and robust. In this regard, periodic reviews have proven to reinforce a culture of integrity. They also promote accountability, particularly at the senior management level, since these leaders are typically engaged in the review process and bear responsibility for supporting compliance across the organization in order to meet the broader governance expectations – expanded by the ECCTA 2023. Within the context of the failure to prevent fraud offense, a well-structured and regularly reviewed compliance program serves as a strategic defense, both to mitigate risks and liability. The reviews may be conducted internally by the compliance department, however, when conducted by outside counsel, it provides added value by ensuring independence, minimizing potential conflicts of interest, and enhancing the credibility of the assessment before regulators and stakeholders. Conclusion The Act has increased legal and operational exposure for large organizations with direct or indirect links to the UK – mainly due to the introduction of the failure to prevent fraud offense. In response to this heightened regulatory landscape, the periodic review of the compliance program assumes a strategic role. By systematically evaluating the practical effectiveness of the internal compliance programs, the review enables organizations to identify and remediate deficiencies before they escalate into regulatory consequences. For Brazilian companies with operations, clients, or assets in the UK, or for UK companies with a presence in Brazil, the September 2025 enforcement underscores the urgency to act. Implementing and maintaining reasonable prevention procedures is essential not only to support a defense under the ECCTA 2023, but to also foster a culture of integrity and accountability across all levels of corporate governance. This resonates with the spirit of the Brazilian Clean Companies Act. Taken together, these legal frameworks highlight the need for companies operating transnationally to align compliance programs to both jurisdictions, embedding continuous monitoring, periodic reviews, and strong governance practices. Authors: Isabela Vidal, Leonardo Kozloswki , Salim Saud.