The outbreak of the new coronavirus required emergency measures by Federal, States and Cities Governments in Brazil. The measures impose restrictions to a sort of activities that will affect the capacity of the respective providers to collect revenues. In this sense, the intervention of the Government in the economic activities has a potential of causing dramatic damages to big and small business of all natures.  However, the ability of such business to collect indemnification from the Government for such damages will vary on the nature of the service provided by each of the business.

 

An important distinction that helps to categorize the different sets of rights of affected parties is whether they provide public services under a long term agreement with the Government or not. The distinction is first step and most relevant one to identify the legal relationship and therefore rights and obligations of the parties involved.

 

Public service providers shall have the benefit of indemnification by the Government, since at the same time they have the obligation of continuity of the services. Therefore there is a symbiotic relationship between public services and necessary indemnification, that shall place this category of business in the first place of the queue for indemnifications.

 

On the other hand, businesses that exploit the economic activity (which form the most part of the economy of any democratic country) under no special contractual relationship with the Government shall have a different treatment. According to our Constitution, new statutes shall not restrict or oppose vested rights. However, the measures to combat the outbreak of the new coronavirus are based on the principles of dignity of the human being and protection of public health. In this sense, administrative or in courts questioning the restriction measures by themselves shall lead to no useful result. In this scenario, the viable measure for this category is to request damages in courts against the Government, based on the general liability rule, by which the private parties will have to demonstrate that the Government acted with willful misconduct or negligence in the restrictions imposed.

 

Note: this paper is a reaction to the question on whether private parties have a claim against the Government due to the emergency measures by Federal, States and Cities Governments in Brazil. The conclusions are based on the current Brazilian legal framework and our experience in similar cases. There is no substantive court law on the matters of Covid-19. In this sense, the conclusions shall be updated in view of new developments in courts. 

 

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(The Impact Lawyers: https://theimpactlawyers.com/articles/covid-19-in-brazil-claims-against-the-government)