Brazil: Liability for Breaches against Economic Order

The economic committee of the senate has passed the Senatorial Law No. 283 (“PLS”) by changing Law 12.529 / 11 (“LDC”). The law concerns the Brazilian competition rules as well as the prevention and suppression of breaches against the economic order.

PLS stipulates that all economic players that suffered from breaches against Article 36, §3, I and II of the LDC will receive doubled compensation. However, this is not the case if the offender has a principal witness agreement with the Administrative Committtee for Economic Defense (“CADE”) or has signed an agreements ending his misconduct (“TCC”). Offenders whose breaches end either with a principal witness agreement or a TCC will not be tried together with other participating offenders. They will only be held responsible for the damages they caused directly.

Furthermore, the law regulates the limitation periods for compensations. Even in case of an ongoing investigations by CADE there will be no limitations. However, a period of five years is stipulated based on the knowledge of the affected person regarding the existence of illegal activities. According to PLS, the limitation period starts with the publication of the final examination of the administrative process by CADE.

Finally, the law states that CADE receives the offender`s commitment to participate in a court of arbitration when signing the CBC. This enables the damaged person to claim his damages.

The law which includes further change request for developing countries will now go to Congress for revision. If Congress agrees, the president can ratify it.