Efficient litigation management generates significant savings for companies
Opinion 3 minute read

Efficient litigation management generates significant savings for companies

10 August 2017

It may not seem like it, but one of the most complex tasks assigned to the legal departments of large companies is the management of lawsuits, and not the lawsuits themselves. The larger the company, the more capillarity it will have and the harder it will be to carry out this job. This happens due to several reasons.

In 2016 alone, the Labor Courts received 3 million new lawsuits[1] - we are talking about a huge volume of lawsuits at different instances and stages.  Also, a study conducted by the National Council of Justice predicts that the number of lawsuits pending in Brazil will reach 114.5 million by 2020.

On the corporate side, the growth in the amount of litigations and the complexity of its management create issues that go beyond legal knowledge. Among other things, it is necessary to constantly monitor deadlines and have the latest information on hand in order to make the correct decisions. For example, imagine a company with branches nationwide and a centralized legal department. If one of the branches is notified about a new decision in a lawsuit, how long will the notification take to reach the appropriate person to handle it?

Depending on distance, time and any other relevant variable, this may cause the company to miss deadlines, hearings or, being optimistic, it can cause a delay in the gathering of documents or preparation of a defense. Another factor to consider is that lawyers are usually paid on a monthly basis so, the more time they spend, the higher the fees will be.

According to the Central Bank of Brazil figures, in 2016 judicial deposits reached approximately R$184 billion. These deposits are payments made during the course of the lawsuit and whose final sum exceeds the declaration of guilt, resulting in “stagnant” amounts pending collection by the company.

Specialized management

Considering the above mentioned factors, litigation management can result in a big financial loss.  To help avoid these losses and conclude the lawsuit process in the shortest time possible (legally), with the lowest legal costs - and in the case of judicial deposits or lawsuit wins, with a greater effectiveness in controlling the amounts already disbursed - TMF Group offers a specialized litigation management service.

This service records the legal and administrative suits related to client companies, thus allowing their precise monitoring as well as the mapping of the legal risk for controllership purposes. To that end, the service includes the provision of a series of reports, which can be weekly or monthly, and identifies several items such as schedules, summons, subsidiary/joint liability, registered lawsuits, hearings by period, lawsuits by legal firm or by client unit, defaults, moral damages, judicial and appeal deposits.

Through this service, we can also provide information and documents on active employees to comply with the Ministry of Labor audits for the last three months, and handle the calls and the reception and the registration of notifications.

Our legal teams will monitor everything that happens in the Judiciary in real time, helping control everything that is happening and, especially, anticipating important information.  The analysis of causes also allows preventive actions and strategic decision making with the ensuing reduction in the volume of lawsuits.

Bottom line, a well-done control greatly reduces the risks of negative entries.

Get in touch with our experts today to learn how we can help your company. 

Written by

Vanessa Mello

Director Legal and Compliance

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