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Brazil’s Best Counsel 2022 - Chapter Opening: Large-Scale Consumer Litigation
The Challenges of Large-Scale Consumer Litigation
In times of digital transformation, legal conflicts are expected to grow in scale. A traditional concern of major litigants, the in-house legal departments of large companies currently need, in addition to carefully knowing and managing their mass litigation portfolios, to treat each portfolio differently, aiming to identify, for prevention purposes, their main flaws, as well as a legal course of action that will make it possible to win back the dissatisfied customer and, at the same time, reduce the costs of legal proceedings.
The problems generated by the dissemination of new consumption methods changed market demands. Years ago, legal departments selected law firms for their technical capacity and efficiency in controlling legal cases, while today these companies increasingly need to make use of several simultaneous practices, such as the wide use of technologies, data analysis, management dashboards, mastery over digital courts, legal design, among other tools.
Analyzing the research carried out by InteliJur1 regarding the skills expected of legal departments, in 2011, for example, the main concern was the “specialization of the firm/expertise” as an essential quality in the employment of legal services. Today, this ranking is led by “availability”, “fast service”, “office reputation” and “creative and innovative solutions''.
Delivering innovative solutions has never been more important for legal departments when working with large-scale litigation. New tools resulting from technological advances, such as the use of data collection bots, have allowed law firms to help their clients, prematurely identifying repetitive cases, and devising the appropriate strategy to solve underlying problems.
Each lawsuit needs to be analyzed according to the information provided by the client, requiring an adequate strategy. Lawsuits in which companies expect to win need their own indicators, which aim to increase the success rate, while cases with a risk of defeat need to be dealt with in such a fashion that enables a reduction of the amounts spent, always looking for a swift solution, all of which entails an adjusted settlement policy, with specific amounts defined by region and the subject matter of the lawsuit.
In times of digital transformation, legal conflicts are expected to grow in scale
A follow up must be carried out through the management of folders, with intelligent workflows to increase the efficiency of the process and to allow the development of management dashboards that will support the legal department and law firms in strategic decisions regarding the portfolio.
As representatives of the companies before the judiciary and as recipient of their complaints, law firms must always transmit their impressions to their clients based on concrete data, providing elements that solve even non-legal problems, such as adjustments to logistical and financial procedures, drafting of contractual clauses, among others.
In line with expectations and convinced of the chances of success, it falls to the law firm to use all legal tools to help convince judges, such as constant presence in courts and sessions, presenting their oral arguments, as well as extensive use of legal design making sure that judges fully understand what is being discussed and the effects of their decisions.
Our experience has shown that companies that use infographics, simulated environments and direct language in their papers, have obtained better results, more invalidity claims or reduction of the average ticket in unfavorable cases, all according to data collected by our firm, which employs legal design on our papers, contracts and legal opinions for quite some time.
In managing the portfolio of a new retail client, our firm reformulated the papers presented using a less formal language, created a website that simulates the shopping environment for the magistrate, used infographics and legal design. After three months of data gathering, in which half of the lawyers used the traditional papers and the other half the reformulated part, the result was a reduction of 15% in negative judgments in those lawsuits with the revised papers, showing to the client the importance of the theme.
Delivering innovative solutions has never been more important for legal departments working with large-scale litigation
On another occasion, we were hired by a client in the credit management area whose lawsuit portfolio increased exponentially in a few months, due to aggressive influence of some lawyers. The client came looking for a strategic approach with a view to changing the local judicial understanding of these cases and also for pro-activity before anti-fraud authorities.
From the analysis of data provided by business intelligence reports, our firm acted on simultaneous fronts, arguing individually before the judges, developing objective legal arguments that addressed the core of the issue pointed out by the judges, suggesting to the client the production of different written evidence, presenting mass arguments for large sentencing, in addition to the submission of formal notices to anti-fraud authorities. After six months, we managed to change the understanding on the subject matter in 5 Courts and 1 Appeal Panel, causing a relevant impact on the results of the legal department.
We applied technology and data analysis to enable problem identification and a rapid treatment, producing results within a few months of operation.
Another relevant challenge concerns the implementation of the so-called digital court. This phenomenon has had a huge impact on the conduct of the lawsuit portfolios. If, on the one hand, it brought speed, allowing the standardization of various acts - such as holding hearings and orders -, on the other hand it increased the challenge of receiving virtual summons and citations by companies, the implementation in countryside districts and the absolute dependence on these technologies, leaving the parties hostage in cases of unavailability.
In this regard, preventive action is necessary to avoid failures; therefore, we suggest to our customers adaptations in their internal flows, since the creation of a single corporate email to receive virtual notifications, to our availability to control their subpoena panels, as well as the development of strategies to protect the company from recurring systemic instabilities, such as administrative notification protocols. Therefore, there is an increasingly necessary integration between legal departments and outsourced law firms.
This also meant that law firms needed to train their teams not only in terms of understanding new technologies, but also how this technology is designed and its potential to influence our daily lives. We were pioneers in carrying out the first extension project developed between the Information Technology Center of UFPE (Federal University of Pernambuco) and our firm dealing with “Computer Paradigms and Computational Thinking for Lawyers”, which allowed our members to have a greater familiarity with the subjects of technology used in our daily activities, enabling our team in the most diverse subjects such as the intersection between law and technology, computational thinking, distributed systems and ubiquitous computing, cloud and mobile digital services, computational paradigms, big data, AI, Machine learning, and Data Science, among others.
1) The main benchmark metrics for Brazilian legal departments – 2020/2021.
About the Authors:
Carlos Harten has 19 years of experience working as a lawyer, specializes in litigation and frequently represents key clients from a wide range of industries including the beverages, automotive, telecommunications, insurance, banking and oil & gas sectors. He is President of the Insurance Law Commission at the Brazilian Bar Association (OAB) as well as an OAB Federal Councilor.
Phone: +55 81 2101 5757
Managing Partner of Queiroz Cavalcanti Advocacia, Bruno Cavalcanti has 15 years of experience as a lawyer and stands out for his expertise in the banking, retail, power and automobile industries. He is currently President of the Commission of Insurance Law at IAP – Instituto dos Advogados de Pernambuco; Vice-President of the Commission of Banking Law of the Brazilian Bar Association (OAB) and a member of AIDA – Associação Internacional de Direito do Seguro (International Association of Insurance Law).
Phone: +55 81 2101 5757
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