Brazil´s legal system has its roots in Roman law, with strong influences from various European sources, such as Portuguese, French, German and Italian legislation. Some elements of US law can also be found in the areas of competition, securities, environment law and taxation. Following the re-democratisation of Brazil in 1986, a new constitution was enacted in 1988, dividing the Judiciary into ordinary and specialised courts. As Brazil is a federation, the ordinary court system is established at state and federal levels. The ordinary courts comprise civil and criminal benches and the specialised courts deal with labour, military and electoral cases. Appeals may be filed to the courts of second and third instances. At the top of the pyramid, there is the constitutional court, the Federal Supreme Tribunal. The Superior Tribunal of Justice is the court of last resort for non-constitutional matters. All last resort tribunals are based in Brazil´s capital Brasilia.

Following the adoption of the 1988 Constitution, Brazil became an increasingly litigious country. In 1998, the specialised labour courts alone tried 2.3 million suits. It is estimated that more than 6 million cases were filed in the Brazilian courts in 1999. Of such, approximately 1 million cases are criminal, 2 million labour, 1 million are tax cases and 1.2 million small claims. In the first semester of this year, the 11 member Federal Supreme Tribunal decided approximately 4 thousand cases, circa 33 per working day! The 33 member Superior Tribunal of Justice decides approximately 34 thousand cases per year with published opinions. In spite of such numbers, the Brazilian judiciary has only 12 thousand first instance judges and 250 thousand active lawyers for a population of 164 million. Thosejudges are all civil servants subject to public examination. Brazilian judges beneft from a continuing legal education programme and enjoy a good reputation for independence and honesty. One out of three judges will speak two foreign languages. More sophisticated courts are found in the more economically developed federal states. At present, cases normally take from three to five years before conclusion. Discovery is extensive. Litigation is often expensive. The losing party will have to pay full court fees and legal costs from 10 to 20% of the value of the case.

In view of such pressure to the system, there have been calls from the civil society for reform. The Judiciary has been quick to respond. This year, the federal circuit received the ISO 9002 certification. Petitions in the federal circuit can be filed electronically from anywhere in the country or abroad; follow-up of the procedures can also be effected via computer; files are identified with bar codes. Tax cases can be tried entirely virtually unless one of the parties demands a paper file. This has become necessary as each month there are 80 thousand new tax executions, 30 thousand of which in the state of Sao Paulo alone. The state circuit has created mobile courts to serve the interior of the country and distant districts in large urban centres. Such mobile courts address mostly small claims and are highly computerised for efficiency. In the state of Bahia, small claims courts were set up in shopping centres.

Foreign sentences are ratified in Brazil by the Federal Supreme Tribunal upon the fulfilment of five requirements, as follows:

a. the foreign court must have jurisdiction over person and matter;

b. there must have been a proper summons;

c. there must have been a final judgement;

d. the sentence must have been legalised and officially translated; and

e. the sentence must have compliance with basic principles of morality and public order.

Ratification will be denied if Brazilian courts have exclusive jurisdiction on a matter, which occurs in cases of property located in Brazil and probate of assets in the country. Defendants resident in the country must be properly summoned by means of rogatory letters. An affidavit will have to be presented to the effect that no appeals are possible in the country in which the judgement was made. Arbitration in Brazil is permitted and duly regulated by law. Foreign awards are enforceable in Brazil after ratification by the Supreme Federal Tribunal. Nevertheless, alternative dispute resolution remains rarely utilised for the settlement of disputes in Brazil. It is estimated that only 100 cases were brought before the many arbitration centres established in the country.