Landmark ruling upholds the constitutionality of Civil Procedure Code provision, enhancing legal certainty for the legal profession
Brazil’s Federal Supreme Court (STF) has ruled, by majority, that attorneys’ fees — including contractual fees — have priority over tax claims in cases of debt enforcement. The decision, which carries binding effect due to general repercussion (Tema 1,220), validated the constitutionality of Article 85, §14 of Brazil’s Civil Procedure Code (CPC) of 2015.
This is a significant milestone for the Brazilian legal profession, as it affirms that legal fees are of an alimentary (subsistence-related) nature and, as such, deserve preferential treatment — even over tax debts owed to the government — in line with Article 186 of the National Tax Code (CTN), as amended by Supplementary Law No. 118/2005.
Background: Conflict Between Fee Priority and Tax Claims
The controversy arose from a case in Brazil’s Federal Regional Court of the 4th Region (TRF-4), where a constitutional challenge was raised against §14 of Article 85 of the CPC. The lower court argued that only supplementary laws may define the ranking of creditors in judicial debt enforcement, as per Article 146, III(b) of Brazil’s Constitution.
The provision in question establishes that both court-awarded and contractual legal fees enjoy priority status, even in relation to tax debts. TRF-4 rejected this, reasoning that such a rule exceeded the scope of ordinary legislation and intruded into matters reserved for supplementary law.
The STF’s Ruling: Attorneys’ Fees Take Priority
The Supreme Court overturned the lower court’s position. Writing for the majority, Justice Dias Toffoli concluded that Article 85, §14 of the CPC is both formally and materially constitutional. The binding thesis set by the Court reads:
“§14 of Article 85 of the Civil Procedure Code is formally constitutional in recognizing the priority of attorneys’ fees, including contractual fees, over tax claims, considering the provisions of Article 186 of the National Tax Code.”
Justice Toffoli emphasized that Article 186 of the CTN — itself a supplementary law — already lists exceptions to the State’s preferential tax credit rights, such as secured debts and labor-related claims. He argued that attorneys’ fees, due to their alimentary nature, fall within the same rationale and do not require a separate supplementary law to be recognized as having priority.
He further explained that the definition of attorneys’ fees as alimentary in nature is a procedural matter, and therefore appropriately addressed through ordinary legislation like the CPC.
Dissenting Views
Justices Gilmar Mendes, Flávio Dino, and Cristiano Zanin dissented partially. Their interpretation suggested a narrower scope — possibly granting priority only to court-awarded fees (honorários sucumbenciais) or denying priority over tax claims altogether. However, the majority opinion prevailed, and the broader interpretation was upheld.
Practical Implications
This decision brings much-needed clarity to a contentious issue and affirms the essential role of legal representation in Brazil’s justice system. Key takeaways include:
- ✅ Uniformity across jurisdictions: All courts must now recognize the binding precedent granting priority to attorneys’ fees over tax debts.
- ✅ Reinforcement of legal profession: The alimentary nature of legal fees — akin to wages — is acknowledged and protected.
- ✅ Fiscal balance respected: The Court found that prioritizing legal fees does not undermine the State’s tax collection authority, but instead strengthens the judicial process by ensuring fair compensation for lawyers.
Final Thoughts: Legal Services as a Pillar of Justice
The STF’s decision in Tema 1,220 goes beyond corporate interests; it affirms the constitutional role of lawyers as essential to justice, as stated in Article 133 of Brazil’s Constitution.
By granting legal fees precedence over public tax claims, the ruling reinforces both legal certainty and the dignity of legal work, setting a clear standard for courts, public agencies, and legal departments across the country.
For law firms and in-house counsel, the decision is a powerful tool in fee enforcement litigation — especially in cases involving disputes with public entities. Going forward, all lower courts are bound to apply this precedent as a matter of constitutional interpretation.