Approaching this special focus on litigation, in particular surrounding the Latin American region, our next thought leader believes keeping abreast with the latest legal developments, communication with foreign lawyers and clients, and effective translation of domestic legislation are key to secure and comfortable firm operations.
Here, Leonardo Alonso, Managing Partner of Alonso Lopes Groch Advogados, a Brazilian commercial litigation firm, discusses how his team is following these points, making it a mission to deliver leading services for their clients.
What would you say has been the biggest legislative development to affect your work in litigation over the last few years in Brazil?
First of all, there is a significant change in the way authorities have been acting due to corruption and corporate crimes prosecution. We are currently seeing a clear tendency in Brazil, where foreign theories are being imported, such as the Control Theory (Control over the fact), created by German scholars, among them and most importantly Claus Roxin, and implemented by the Brazilian Supreme Court in the Mensalão Case. Originally, this theory aimed at identifying principals and accessories to the crimes, as required by German Criminal Law. In Brazil on the other hand, they have been put into use to justify the prosecution and condemnation of those not acting with the required actus reus and mens rea, but that due to their position in companies or governments, should be understood as equally responsible. We can also refer to the use of wilful blindness theory and the criminalization of omission. This misinterpretation and misuse by Prosecutors and Judges is leading to greater risks of criminal accountability to corporation’s directors.
As for the legislative development, the acceptance of plea-bargaining is hugely affecting the work of criminal litigators in Brazil.
Other legislative development relates to the expansion of the predicate offenses in the money laundering legislation. Until July 2012 Brazilian legislation considered just drug trafficking, terrorism, illegal trade of weapons, kidnapping, corruption, financial crimes and criminal organizations as predicate offenses for the crime of money laundering. The list was then expanded to include any criminal offense, meaning that any crime can give rise to the crime of money laundering, whereas until 2012, only a restricted number of conducts was acknowledged as such. Besides that, Brazilian legislation on money laundering has the peculiarity of treating not only the “cleansing” of illegal money a crime, but also the concealment of such values, regardless of their re-inclusion in the financial system. As a matter of fact, Brazil has a very broad concept of money laundering, which gives enforcement authorities too much discretion on how the indictments are filed.
Are there any upcoming changes in the Brazilian litigation landscape your potential clients should be aware of?
In January 2014 the 12.846/2013 Act (also known as Anticorruption Act or Clear Company Act) came into force, establishing the way corporations can be punished in cases of corruption and bidding frauds. That is a very sensible landscape as the act establishes strict liability to the corporations. An effective compliance programme, for instance, does not exempt the company from accountability.
The act refers to civil and administrative accountability. This legal regime is very similar to criminal liability, which is very questionable in terms of constitutionality, as the Brazilian Constitution predicts criminal liability for legal entities only in cases of environmental crimes.
Although in force, this act has seen little to none enforcement, as much of the attention and enforcement attention is currently directed towards the Petrobras Oil scandal (Operação Lava Jato), the facts pertaining to which predate this act and are not applicable.
There is no doubt that the coming years will give rise to an increased number of prosecutions following the predications in this act.
What kind of clients and litigation matters do you most commonly deal with at the firm?
At our firm we mostly deal with firms or individuals in any way connected to corporate activities. The corporate crimes landscape in Brazil ranges from the most complex financial matters, passing through to environmental cases, and to labour accidents.
Our practice consists of strategic litigation (criminal proceedings in which our client is the victim or is the subject of an investigation), legal counselling (compliance, prevention and management of criminal risks), and fraud and other internal corporate investigations.
Our firm represents clients in a wide range of activities, such as big and medium financial corporations, industries, service providers, big farmers, and famous luxury brands.
What are the legal challenges involved in these scenarios?
Arguably, the main challenge is in considering the way enforcement authorities have been acting these days, to protect directors and members of the board from employees and third parties’ illegal actions, creating preventive mechanisms or defensive litigation strategies, diminishing, therefore, the risk of criminal prosecutions.
Another aspect that we can point to as a challenge is the change of understanding in our Supreme Court regarding when a convicted person must start serving their sentences. Until recently, only an unappealable decision could start the serving sentence period. Now, according to the majority of our Supreme Court, it can start right after a conviction sentence submitted to two levels of jurisdiction. Along these lies a feeling that serving a criminal sentence will no longer be a taboo in corporate criminal cases.
What particular challenges do these clients bring to your work, and what about cross-border litigation cases?
Even in corporate crime matters in the end you always deal with individuals, their fears and vulnerabilities, which make every case a psychological effort. In our area of practice, more than anything else, it is mandatory to take good care of the client.
Having our focus not only in procedural matters but also, and mainly, in substantive law, we can affirm that our practice is multidisciplinary. Due to the exploration of affirmative defenses in corporate crime, it is important not to be restricting in criminal law theory, and do in-depth research into the subsidiary areas of law (tax, competition, environmental law, etc.) involved. Thus it is safe to assume that every case is totally different from the other.
How would you say your education, experience, strengths and initiative contribute towards the thought leadership you boast in the Brazilian litigation landscape today?
Blending our practical experience in solving diverse criminal issues with a comprehensive theoretical knowledge of the law is a real asset; as is the capacity to adapt to ever-changing circumstances and provide full commitment to our clients.
We truly believe that staying tuned with developments in other countries and other areas of practice is a matter of survival in this market. We also pay full attention to how we make our cases and present them in front of judges. It is important to do it differently, but not in a caricatured or a fabricated way.
To finish, just as Justice Scalia used to say, showing affection is not a sign of lack of combativeness.
Is there anything else you would like to add?
First of all, thank you for having me. That being said, it is important for your audience to know that Brazil is passing through a very peculiar moment right now, and the pendulum is kind of overhanging, which is good in terms of attracting fully committed investors. It is truly important as a matter of evolution to be in contact with foreign clients and lawyers. On the other hand, it is also part of our job to translate and communicate the way our legal system works to clients and other lawyers abroad. This efficiency in communication generates a sense of security and comfort, and is our mission.
Do you have a mantra or motto you live by when it comes to helping your clients?
Do it simple and be effective. Know the business of your client and use him as a partner to solve the case.
What do you feel you couldn’t live without?
Music and literature; they just give you the capacity of abstraction and finding non-obvious solutions.
What motivates you most about your role?
Always being in contact with different kind of cases and helping our clients solve their issues.
