In the Brazilian legal system, there are three types of precatórios: small value obligations, precatórios of a priority nature, and ordinary precatórios.

The precatórios of a priority nature are those that, as provided for in the first paragraph of article 100 of the Federal Constitution, derive from "salaries, wages, earnings, pensions and their supplements, social security benefits, and compensation for death or disability, based on civil liability, by virtue of a final and unappealable decision."

The attorney's fees for loss of suit awarded by the Judiciary against a public entity (Federal Government, states, municipalities, as well as their independent agencies and foundations) are also considered priority precatórios.

Priority precatórios have preference in the order of payment over precatórios of a common nature. Holders of priority precatórios who are at least 60 years old or have a serious illness or disability will be given special preference within the system itself.

Since precatórios can take years to be paid and there are still many uncertainties related to the constant legislative changes in the framework for these securities, assignments of precatórios entered into by their original holders with third parties are common.

Through the assignment of a precatório, the assignor benefits from the advance - partial - receipt of his receivable, while the assignee purchases the precatório at a discount, i.e. for a lower amount, in order to receive, in the future, full payment of the precatório to be made by the public entity.

Many investors have doubts about the maintenance of the priority nature of the precatório after its assignment to a third party. This would be the case, for example, of an investment fund in credit rights that, by means of assignment, acquires a precatório relating to a receivable for loss of suit fees held by a lawyer or law firm. In such a situation, would the priority of the precatórios be maintained, even if the purchaser is not a lawyer or a law firm?

After several contradictory decisions handed down by the Judiciary, this impasse was resolved by the Federal Supreme Court (STF), which granted relief to Extraordinary Appeal 631.537 and unanimously defined Topic 361 of general repercussion. According to the court's decision, the change in the ownership of the priority precatório by means of assignment does not imply a change in its nature, and the precatório continues to have, therefore, its original preferential nature.

According to the vote of the reporting justice, Marco Aurélio, there is no rule in the legal system that mandates change in the priority nature of the precatório after its assignment. The Judiciary and the public debtor entity, therefore, could not modify this intrinsic preferential characteristic of the priority precatório, which would directly interfere in its payment system.

According to the Supreme Court, if the precatório lost its preferential quality, there would evidently be less interest from investors in its acquisition and a decrease in its market value, which would be harmful to those creditors considered preferential by the Federal Constitution.

The court ruled for the application of articles 286 and 298 of the Civil Code, to the effect that there is no impediment on assignment of a priority precatório. When acquiring a claim by assignment, the assignee assumes the legal position of the assignor, and the assignment covers the ancillary rights. Thus, for purposes of assignment of the precatório, the objective or subjective conditions of the new creditor are irrelevant, since it is subrogated to the same and exact conditions as the original creditor.

In addition, article 42, paragraph 1, of the National Judicial Board Resolution 303/19 already established that assignment does not alter the nature of the precatório and that the assignee may enjoy a preferential condition resulting from its priority nature, maintaining the original chronological position of the precatório.

The judgment by the Federal Supreme Court in Extraordinary Appeal 631.537 is considered a leading case that has brought legal security to investors interested in acquiring priority precatórios and to their original holders.