Member Article

The shifting of the burden of proof is an issue of great concern for suppliers when involved with litigation over product liability. This is so because (i) current and prospective legislation governing the shifting of the burden of proof in consumer law cases aims at putting consumers at an advantageous position in litigation and (ii) recent court decisions suggest that, even when the burden is not clearly shifted at the beginning of litigation, suppliers may have to behave as if it had been.

Article 333 of the Brazilian Code of Civil Procedure sets forth that plaintiff must prove the facts that "constitute his right" – and, accordingly, the defendant must prove those facts that "modify, extinguish or prevent plaintiff's right from being enforced". This rule has two purposes: (i) it helps judges to specify which evidence shall be produced by each party, and (ii) it also allows them to decide a case when the parties made claims that were not duly supported by evidence in the course of litigation. When it serves the purpose of defining which evidence must be presented by each party, article 333 works as a rule of procedure; when it influences a Court's final decision, it is a rule of judgment.

In product liability cases, the burden of proof is governed by article six of the Consumer Defense Code – pursuant to which judges are allowed to shift such burden in favour of consumers when their allegations are deemed to be plausible or when the consumer is considered to be in a weaker position as compared to the supplier. The Consumer Defense Code understands that, in the context of product liability litigation, consumers are not in the best position to produce certain kinds of evidence, and that such circumstance could prevent claims from being presented – or, at least, from being presented with relevant chances of success.

Shifting the burden of proof, in this context, can be seen as a rule of public policy or as a rule of distributive justice. It is a rule of public policy because it deliberately encourages the filing of claims by consumers against suppliers; it is a rule of distributive justice because it allows consumers to recover damages suffered due to defective products – but that would not be compensated, due to the difficulties that plaintiffs would face trying their cases under article 333 of the Code of Civil Procedure, unless a rule allowing the shifting existed.

It is clear, thus, what purposes such rule could serve. Nevertheless, its scope has not been clearly defined: even though judges originally used it as a rule of procedure, to be applied at the moment when parties are told which evidence they should produce, some Courts are now applying it as a rule of judgment. In these decisions, judges conclude that a certain question of fact, which constitutes plaintiff's right, was not clearly demonstrated through the evidence contained in the case dockets – plaintiff did not demonstrate that a certain factual element existed, and defendant failed to demonstrate that it did not exist. However, since (i) plaintiff's claim is plausible, or because (ii) defendant was in a better position than plaintiff to produce evidence regarding that controversial issue, Courts find for plaintiffs in such situations.

Legal doctrine and jurisprudence are still divided about this issue: some scholars point out that shifting must take place before the parties are told which evidence they should produce, and that applying article six of the Consumer Defense Code as a rule of judgment violates the constitutional guarantee of due process of law. Others, however, understand that parties do not need to be told in advance that the burden of proof regarding a certain issue has been shifted: parties have the procedural duty to present all the evidence that may be of relevance to a case, and applying article six as a rule of judgment furthers the social policy pursued by the Consumer Defense Code.

An initial assessment of the problem suggests that article six should not be employed as a rule of judgment – in these situations, shifting the burden of proof does not foster any purpose of distributive justice (it is not clear that we would be reaching situations where plaintiffs would not be able to obtain an indemnification or situations where the payment of an indemnification is simply not due), and the harm it causes to defendants, who are surprised by a decision stating that they should have done something they were not previously told to, is probably at odds with the constitutional guarantee of procedural due process.

The Superior Court of Justice, a Federal Court with the task of unifying the interpretation of Federal Law in Brazil, does not have a solid position about this issue. Nevertheless, the Court recently understood (albeit in a split decision) that article six of the Consumer Defense Code could be applied as a rule of judgment – even when it results in the supplier being required to prove negative facts (for example, that a certain bottle did not explode, as plaintiff claimed in the complaint that led to this precedent).

This decision is not final, but, due to the authority of the Court that rendered it, it should certainly be taken as a very eloquent warning for all firms the activities of which are regulated by the Consumer Defense Code. As its counterpart from the Code of Civil Procedure, article six of the Consumer Defense Code might also be applied as a rule of judgment – and, therefore, defendants might be better off if they actively participate in the production of evidence, and present all the evidence they are able to, even if a Court did not expressly told them to do so.

It might be wise for companies that are not regulated by the Consumer Defense Code to be prepared to do the same: the dynamic distribution theory, which recently appeared in Brazil, intends to impose the burden of proof to the party that is deemed to be in the best position to produce that specific evidence. This theory, created in Argentina, has been increasingly adopted by Brazilian courts and scholars in the recent years. There is no specific rule in the Code of Civil Procedure that authorises the application of this theory; nevertheless, Courts have been invoking "general principles of civil procedure" in order to enforce it in Brazil.

So far, the dynamic distribution theory has only been employed as a rule of procedure – but, since its application does not have a clear legislative basis, litigation strategy should consider that Courts might also apply it as a rule of judgment. Moreover, certain Bills of Law contemplating the introduction of a Code of Collective Rights in the Brazilian legal system adopt the dynamic distribution theory as the rule to be observed in class actions. These Bills of Law, if approved without modifications, will certainly cause a significant impact in product liability litigation – and, likewise, will be of enormous relevance for companies operating in Brazil.

 

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