Spacca
Given that justice is a public good, it is necessary to analyze its impact on the efficiency of the economy as a whole and how the institutional environment in which it operates affects its performance. One way to measure its impact is by comparing the average length of judgments to the rate of bankruptcy recovery. It’s a fact: the longer the delay, the more value is destroyed.
Based on the average sentence length in the UK, Italy is 1.6 times longer and Brazil 4.8 times. Also compared to the UK, the value of what is lost in bankruptcy is 1.3 times higher in Italy and 4.7 times higher in Brazil. Correlation is high and causation confirms that longer justice is more costly to society.
Another aspect to consider is the comparison of institutional complexity between countries and the average length of sentences. Using the average number of hours companies spend paying taxes as an indicator of complexity and also compared to the UK, Italian is 2.1 times more complex and Brazilian 13.2 times more complex.
The order of causation is reversed: the more complex the taxes, the longer the sentences take. The Brazilian judge has to administer justice in a more incomprehensible environment. Comparatively, they are more efficient than their foreign counterparts. Dozens of taxes, fees, and contributions are located here, in Brazil.
Indexing is another example that illustrates institutional complexity. While England and Italy have only one indicator, which is used sparingly, in Brazil there are more than ten, which are used in abundance. It’s so baffling that there are lawsuits over the cataloging of decades-old installation plans. Hundreds of millions of riyals spent on lawyers.
An aggravating factor of the indexation is the correction of tax debts. It is corrected by Selic rate. It’s a contradiction: since the real plan, it has increased ten times more than the inflation measured by the IPCA, 6,676% and 645%, respectively. The state primarily focuses on extracting the maximum amount of resources, in the short term, even at the expense of the economic survival of debtors.
The current amount of tax debt is equal to half of the total credit to the national financial system. Almost all of them consist of a cash correction and penalties to the original values, which turn small amounts into unpaid debts.
The problem is exacerbated because the government is taking legal action to collect debtors for reasons that have far-reaching chances of success. In all, there are 26.8 million tax enforcement actions. There are cases in lawsuits where the claim is R$2, and the cost is allocated to the judiciary, when it should be allocated to the executive. The public authority is the largest litigant in the Brazilian judiciary.
Tax foreclosures account for 35% of all pending cases in Brazil. There are processes that go on forever. There are 7.1 million pending transactions and more entries than exits. In the midst of the crisis, defaults worsened, and the state, instead of being part of the solution, seemed to be part of the problem of the economy, burdening the judiciary.
The judiciary is used as a debt collector for debtors who do not have assets to pay. There is a misinterpretation of the Financial Liability Act regarding the assignment of revenue. There can be no talk of a revenue waiver when the amount pursued is less than the cost of the operation itself.
Exacerbating the situation, when it loses, the state systematically resorts to the use of procedural privileges, such as different deadlines for appeal, being a privileged creditor in bankruptcy, at the expense of other creditors, and exercising judicial proceedings in its favor regardless of the prior filing. . The justification for these powers is the public interest.
The public interest is to promote employment, the solvency of citizens and businesses, an effective judiciary, and compensation to the judiciary for the services it receives. Public interest cannot be confused with financial extraction, a system in which one pays only because it is prescribed by law.
It is a fact: the internal efficiency of justice can be improved. Several actions are under way in this regard, focusing on proposals from the National Council of Justice and the work of judges from the São Paulo Association of Judges in association with the Center for Economic and Social Law Studies. It is also a fact that there are spaces for improving the performance of the executive branch at all levels of government, which can increase the contribution of justice to the welfare of the Brazilian nation.
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