Losing a lawsuit in Brazil: the loser pays the other side’s lawyer

By Ramon Martins Andrade, attorney (OAB/RJ 188.374)

If you are considering suing a hospital, a doctor or a health insurer in Brazil, there is one rule you should understand before anything else, because it does not exist in the United States and it changes the arithmetic of the whole decision.

In Brazil, the losing party pays the winning party’s lawyer.

There is no American rule here. Article 85 of the Brazilian Code of Civil Procedure states that the judgment shall order the losing party to pay fees to the winning party’s attorney. Article 82, paragraph 2, adds that the loser also reimburses the expenses the winner advanced.

How much

Article 85, paragraph 2, sets the range between ten and twenty per cent, calculated on the amount of the award, on the economic benefit obtained or, where that cannot be measured, on the updated value of the claim.

The second half of the equation is the one foreign clients miss. Under article 292, V, in a claim for damages, including moral damages, the value of the claim is the amount sought. The number written into your petition is the basis on which your exposure will be calculated if you lose.

So a medical negligence claim seeking R$ 300,000 that is dismissed in full generates fees of R$ 30,000 to R$ 60,000 payable to the other side’s lawyer, plus court costs and the expenses the defendant advanced. That is not an estimate. It is the arithmetic of the two provisions.

Where the defendant is a public entity, such as a public hospital or the national health system, paragraph 3 replaces the flat range with tiers that decrease as the amount rises, starting at ten to twenty per cent and falling to one to three per cent in the largest brackets.

Two hopes the case law has closed

The first is that the judge will award a symbolic amount. Paragraph 8 allows fees to be set on an equitable basis, but only where the economic benefit is unquantifiable or negligible, or the value of the claim is very low. In Theme 1076, decided by the Special Court of the Superior Court of Justice on 16 March 2022 (REsp 1,850,512), it was settled, with binding effect, that equitable assessment is prohibited where the amounts involved are high.

The second is that equitable assessment will at least be cheap. Paragraph 8-A, introduced by Law 14,365/2022, requires the judge in that scenario to apply the Bar Association’s recommended figures or the ten per cent floor, whichever is higher.

Contingency arrangements do not cover this

Brazilian lawyers may work on a contingency basis, and many do. That agreement governs what you pay your own lawyer. It has no effect on what the court orders you to pay the opposing lawyer, which arises from statute and is a separate obligation owed to a third party.

The asymmetry is worth stating plainly. Under a pure contingency arrangement your lawyer risks time. You risk money. The person best placed to assess the odds is the one least exposed if the bet fails.

Brazilian professional rules address this directly. Article 9 of the Bar Association’s Code of Ethics requires the lawyer to inform the client, clearly and unequivocally, of the risks of the claim and of the consequences that may follow from the proceedings. A lawyer who presents litigation as a cost-free opportunity is not merely optimistic. He is in breach of a disciplinary rule.

Legal aid, and why it may not apply to you

Article 98 grants free legal aid to those without sufficient resources, and paragraph 1 covers court costs and both attorney and expert fees. But paragraph 2 is explicit: the grant does not remove the beneficiary’s liability for the costs and fees arising from losing. Paragraph 3 suspends enforceability for five years and extinguishes the obligation thereafter, unless the creditor proves the beneficiary’s circumstances improved.

For a foreign claimant with income and assets abroad, this benefit will rarely be available. The exposure is generally the full amount.

Expert evidence is paid upfront

In medical, dental and veterinary claims a court expert is effectively unavoidable. Under articles 82 and 95 the party who requests the expert advances the fee, and each party pays for its own technical assistant. That money leaves before any judgment and is not returned if the claim fails.

What this should change

None of this is a reason not to sue. It is a reason to sue with the numbers in front of you. Before signing a power of attorney, ask what value will be attributed to the claim and why, and ask, as a figure, what you would pay if the claim were dismissed in full. Ask for the answer in writing.

One more thing worth knowing: inflating the amount claimed raises the ceiling of a possible award and raises your exposure in defeat by exactly the same proportion. A calibrated claim is a financial decision, not a drafting detail.

R.M. Andrade Advogados advises international clients on medical liability and health insurance disputes in Brazil, including an assessment of the cost of losing before proceedings begin. See international clients.

If your situation resembles the one described here, get in touch with the office.

Ramon Martins Andrade (OAB/RJ 188.374) is a lawyer who graduated from UFRJ in 2011, with master’s degrees from Université Sorbonne Nouvelle and from the Naval War College (EGN, Brazilian Navy). He is currently a researcher in Human Rights and Health at ENSP/Fiocruz.

This content is for information and education only. It does not constitute legal advice, advertising of results or any guarantee of outcome, under Rule 205/2021 of the Brazilian Bar Association (OAB).