+55 11 3041 5135

Ricardo Bernardi, a partner at Bernardi & Schnapp Advogados, published an article on excessive judicialization in the Lexology bulletin

Moral damages in Air Transport and Fostering of Litigation

Brazil |August 30 2021

Compensation for moral damages is certainly the main reason for the extraordinary volume of lawsuits in Brazil involving airlines.

Without elaborating on the definition of moral damages according to Brazilian law and jurisprudence, one can say that it results from acts that affect an individual’s personality, honor, good reputation, or dignity, causing psychological distress. However, as a condition for imposing liability for damage of this kind, it is necessary to establish causation between the action or omission of the wrongdoer and the damage. Even in the strict liability system, these are imperative conditions for the right to compensation to arise on this account.

Although Brazilian Law does not contemplate punitive damages, a doctrine of the common law system, Brazilian case law incorporated this concept in the scope moral damages, which, therefore, presents a dual nature: compensate the victim who suffered psychological distress and punish the person who caused the damage, for educational purposes.

In this context, quite peculiar interpretations emerged in Brazilian Courts, in the sense that flight delays or cancellations, in addition to problems associated with carriage of baggage, triggers moral damages rights. Moreover, awards of this nature started being granted to exempt plaintiffs from proving the occurrence of the alleged damage. This is called presumed moral damage, or “in re ipsa”. These interpretations do not hold up after a careful analysis of the most recent precedents and current legislation.

In 2019, the Third Panel of the Brazilian Superior Court of Justice, in an appeal whose judge-rapporteur was Justice Nancy Andrighi (Appeal to the Superior Court of Justice (Resp) no. 1796716), decided that flight delays or cancellations do not constitute presumed moral damage (in re ipsa), therefore, compensation will be due only if an extraordinary fact that caused psychological distress to the passenger is proven to have occurred. Subsequently, putting an end to this discussion, Law no. 14.034, issued in 2020, added Article 251-A to the Brazilian Aeronautics Code, establishing that indemnity for non-compensatory damage resulting from a failure in the performance of carriage contracts is conditioned to the evidencing, by the passenger, of the actual occurrence of the damage and the extension thereof.

The most recent case law and the legislator went well. It is unreasonable to consider that simple flight delays or events of baggage delay or loss cause humiliation or damage to the personality subject to compensation, unless it is admitted that we live in a fragile society, made up of citizens unable to understand the common troubles of everyday life. Admitting that facts like these, or any other setback that we face on a daily basis, give rise to the right to compensation would raise the degree of intolerance in interpersonal relationships to unbearable, to the point of social chaos.

Likewise, it cannot be admitted that such situations give rise to moral damages of a punitive nature, especially when the occurrence is due to force majeure or unforeseeable circumstances, or is motivated by flight safety reasons, which occurs in the vast majority of the situations involving air carriage. Besides, it is not up to the judiciary to

 

impose penalties on airlines, even for any voluntary non-performance of contractual obligations, because the authority to apply penalties in these cases lies with the regulatory agency (ANAC – Brazilian Civil Aviation Agency). Finally, Article 29 of the Montreal Convention, which applicability in Brazil was recognized by the Federal Supreme Court at the time of the trial of Matter 210 of general repercussion, expressly prohibits punitive damages.

Currently, there are debates in Brazil on whether the Montreal Convention also applies to moral damages. Nevertheless, the discussion on moral damages associated with flight delays and cancelations or baggage issues goes beyond what is established or not in the mentioned international treaty. It is at the origin of this alleged right that the analysis of its compensability must concentrate, in order to assess whether the claim is justified or not. And, as shown, in the absence of proof of the actual damage and the causation, any and all claims of this kind must be denied.

This conclusion is of utmost relevance to the debate on excessive judicialization in Brazil. We have been hearing opinions expressed by owners of online compensation websites, which in fact aims at fostering litigation, defending the broad applicability of moral damages in air transport under the false argument that consumers must be protected against supposed failures committed by airlines. In fact, the ones in favor of these theories advocate maintaining the presumed moral damage (“in re ipsa”) with punitive effects legal doctrine, since such doctrine allows the creation of a financial product, consisting in an indemnity right like a “legal commodity”, to the extent it could surface from a simple flight delay or baggage loss, regardless the airline’s conduct, the causation, and the very existence of the alleged damage.

Thus, the Brazilian legal community must consider what to aspire as a society, even if within the limits of the relationships discussed in this article. Do we wish to foster a culture of complaints for the simple advantage of complaining, or do we wish to foster an ethical society, where complaints are filed when there is harmful conduct and actual damage to be redressed?

Law no. 14.034/20, the rules and principles of the Montreal Convention, and the most recent case law, notably the precedent resulting from the trial of Matter 210 by the Federal Supreme Court, if applied according to its “ratio decidendi”, already provide Brazilian Courts and the legal community with the path to follow. In this way, we will achieve the legal certainty that is necessary both for effective consumer protection and for the development of Brazilian aviation, which has a lot to contribute to the development of Brazil by connecting people, promoting trade, generating jobs, and leveraging the country to the prominent place and leadership position to which it is destined at the international level. To do so, it is necessary to release the knots and ties coming from excessive judicialization.

Bernardi & Schnapp Advogados – Ricardo Bernardi

Learn more at https://www.lexology.com/library/detail.aspx?g=2062928a-0d2e-497b-b2e5-7b7d8558ddb4