Brazil’s Labor Court system is intensifying its efforts to reduce excessive litigation and promote more efficient dispute resolution. On May 23, 2025, the Superior Council of Labor Justice (CSJT) approved updates to the National Policy for the Adequate Resolution of Labor Disputes, reinforcing the role of settlement and mediation as core tools in handling labor conflicts.
Key developments include the creation of Judicial Intelligence Centers, new mechanisms to combat abusive and repetitive litigation, and the promotion of innovation and inclusion initiatives. In São Paulo alone, so-called “predatory litigation” is estimated to cost companies R$ 2.7 billion per year, with around 330,000 lawsuits filed annually. This is a critical moment for companies to adopt more strategic and preventive legal approaches.
This new policy aligns with other institutional efforts, such as the 9th National Labor Settlement Week and the Brazilian Superior Labor Court’s (TST) consolidation of binding legal theses that aim to standardize decisions and reduce uncertainty.
What can your company do now?
Here are four strategic steps:
1. Map your labor litigation portfolio and identify cases with potential for settlement, especially in light of recent binding court precedents;
2. Review internal policies and training programs to align with the evolving procedural landscape;
3. Implement an active dispute resolution strategy for key labor matters, integrated into your compliance framework;
4. Assess exposure to abusive litigation practices and take preventive action to minimize recurring risks.
In a scenario of institutional transformation, companies that anticipate legal trends and proactively manage their labor risk will stay ahead. Adopting preventive measures, promoting settlement, and aligning internal practices with the Labor Courts’ new direction not only reduces exposure, but also enhances your company’s reputation and long-term sustainability.
