COURT FEE WAIVERS: WHAT THE BRAZILIAN SUPREME COURT’S RULING IN ADC 80 MEANS FOR COMPANIES.

Nadia Demoliner Lacerda | Leonardo Hiroyuki Kojima

As widely reported, on 3 September 2026, the Brazilian Supreme Court (Supremo Tribunal Federal – STF) concluded its judgment in Declaratory Action of Constitutionality No. 80 (ADC 80), establishing new criteria for granting court fee waivers.

For nearly a decade, a single paragraph at the end of an employment claim could determine who would bear the costs and adverse-party attorneys’ fees arising from the proceedings. A request for a fee waiver, accompanied by a simple declaration of financial hardship, was generally sufficient to exempt an employee from court costs and adverse-party attorneys’ fees. By effectively removing the financial consequences of an unsuccessful claim, this practice encouraged lawsuits containing numerous unsupported claims. The STF’s new ruling brings this approach to an end.

What the STF decided: The Court departed from the interpretation established in Precedent No. 463(I) of the Superior Labour Court (Tribunal Superior do Trabalho – TST), under which an individual’s declaration of financial hardship was sufficient to qualify for a court fee waiver. The STF also set aside the criterion under Article 790, paragraph 3, of the Brazilian Consolidated Labour Laws (Consolidação das Leis do Trabalho – CLT), which presumed financial hardship where an individual earned up to 40% of the maximum benefit payable under Brazil’s General Social Security Regime.

The new framework: Individuals earning up to BRL 5,000 per month will now benefit from a rebuttable presumption that they lack sufficient resources to bear the costs of litigation. Those earning above this threshold will be required to demonstrate that they are unable to afford the costs of the proceedings.

The new criteria are not limited to the Labour Courts. They will apply across other branches of the Brazilian Judiciary until specific legislation is enacted, except in the Small Claims Courts. The ruling will take effect upon publication of the official minutes of the judgment and will apply to proceedings filed on or after that date. Access to justice must unquestionably be available to all, and the ruling does not restrict that right. Indeed, the BRL 5,000 threshold is more generous than the criterion previously established under the CLT and will continue to cover a significant proportion of claimants.

What the ruling does is distinguish genuine access to justice from the indiscriminate use of litigation. Ensuring access to the courts does not mean endorsing excessive or unsupported claims brought opportunistically and based on a declaration that, in practice, was rarely scrutinised. Financial hardship must once again be demonstrated, rather than merely asserted.

What this means in practice: Access to the Labour Courts remains open, but the STF has provided the parties with a clearer, fairer and more predictable framework for determining liability for adverse-party attorneys’ fees. Financial hardship must now be supported by evidence, rather than simply declared.

During a week in which the STF attracted media attention for other reasons, the outcome of ADC 80 did not come as a surprise. It is the latest development in a series of disagreements between the STF and the Labour Courts concerning the implementation of the 2017 Labour Reform.

A similar issue has arisen in relation to whether awards should be limited to the amounts stated in the initial claim, pursuant to Article 840, paragraph 1, of the CLT. While the Labour Courts developed the position that such amounts were merely estimates, the STF overturned a number of decisions on the grounds that, by declining to apply the statutory provision, the relevant judicial panels had effectively conducted a decentralised constitutional review without observing the full bench requirement under Article 97 of the Brazilian Federal Constitution and Binding Precedent No. 10.

The same reasoning is reflected in ADC 80: a criterion expressly established by statute had been deprived of practical effect through judicial interpretation, without any formal declaration that it was unconstitutional. The judgment in ADC 80 therefore not only upholds the legislature’s intent by restoring the effectiveness of Article 790, paragraph 4, of the CLT — a provision introduced by the Labour Reform but effectively displaced by TST Precedent No. 463(I) — but also establishes more objective criteria, providing greater legal certainty for both parties to judicial proceedings.

What changes for companies in practice:

• Closed cases. Nothing changes. The STF expressly limited the temporal effects of its ruling. There is therefore no basis for reopening the issue of fee waivers in cases that have already been concluded or for seeking retroactive payment of court costs or attorneys’ fees.

  
  

• Pending cases. Proceedings filed before the ruling’s effective date will continue to be governed by the previous rules. Expectations should therefore be managed carefully: ADC 80 will not, in itself, provide grounds for reversing a fee waiver already granted in an ongoing case. Nevertheless, the judgment sends a clear signal and is likely to influence how courts assess the issue going forward.

  
  

• New cases. This is where the most significant change will occur. Challenging a fee waiver will no longer be a largely formulaic element of the defence. It may now have a genuine prospect of success, provided that the challenge is properly supported by evidence.

  
  

An employee’s assets and household income will become relevant considerations. Whereas the discussion previously centred primarily on the claimant’s final salary, companies should now move away from generic objections and build their arguments around specific evidence, including remuneration and salary history, subsequent employment, indications of assets and the composition of household income. Where appropriate, they should also request the production of supporting documents.

There is also a strategic consequence. Because ADC 80 was decided through abstract constitutional review, rulings that grant a fee waiver in direct disregard of the parameters established by the STF may give rise to a constitutional complaint before the Court. This may offer a faster and less costly route than pursuing the matter through successive appeals.

A constitutional complaint cannot be used to reassess evidence. It may, however, provide an important remedy where a decision fails to apply the binding parameters established by the STF.

Pending publication of the official minutes of the judgment, companies should use this period to review their standard defence templates and define a clear policy for challenging fee waivers before the new framework takes effect.

Our Labour and Employment team is closely monitoring developments and remains available to provide further guidance.