Plaintiff of a piercing of the corporate veil procedure may now be liable for the payment of attorney’s fees.

For years, the Third Chamber of the Superior Court of Justice (“STJ”) has deemed the plaintiff’s liability for the defendant’s attorney’s fees in a piercing of the corporate veil procedure inadmissible, given the lack of legal provisions to support such claim, as observed in the Special Appeal No. 1.845.536/SC.

However, recently, the STJ changed its stance to establish that the dismissal of the piercing of the corporate veil procedure may warrant the award of attorney’s fees in favor of the defendant’s lawyer who was wrongfully called to litigate in court.

In the ruling of Special Appeal No. 1.925.959/SP, it was established that the procedure has the characteristics of an incidental procedure, rather than a mere ancillary claim, as defined by the Brazilian Code of Civil Procedure (“CPC”). When the defendant is served and evidentiary procedures are undertaken, the procedure resembles an autonomous standard procedure, capable of substantially altering the course of the primary action, and the dismissal of the claim should result in the obligation to cover the attorney’s fees for the prevailing party.

When the piercing of the corporate veil claim is included in the initial petition, the shareholders or administrators of the company will be immediately summoned as defendants and will present their defense. This request is then processed concurrently with the condemnatory plea and resolved through a court decision, thus precluding any debate regarding the imposition of attorney’s fees.

However, in the case of the dismissal of the piercing of the corporate veil claim through the incidental procedure, the procedural relationship formed between the plaintiff and defendant is dissolved by a partial interlocutory judgment, even though it is not provided for in the list of art. 85, paragraph 1 of the CPC, justifying the award of attorney’s fees for the defendants.

In the words of Justice Moura Ribeiro: “The attorney who acts in the piercing of the corporate veil procedure will no longer participate in the proceedings in the event of a dismissal of the petition, hence their remuneration can only be rendered upon conclusive resolution of the veil-piercing claim.”

Accordingly, the Third Chamber, by majority, dismissed the Special Appeal filed by a company seeking to overturn a ruling that admitted the award of attorney’s fees in the judgment of a piercing of the corporate veil procedure, with Justice Nancy Andrighi dissenting.

According to the dissenting Justice, there was no change in factual or legal circumstances justifying the Third Chamber’s change of stance in such a short time. It was also emphasized that allowing the imposition of attorney’s fees in the piercing of the corporate veil procedure represents a punishment to the plaintiff solely because of the path chosen to achieve the requested claim.

Our team is available for further clarification.

Gustavo Flausino Coelho – gustavo@bastilhocoelho.com.br

Shayenne Freitasshayenne@bastilhocoelho.com.br

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