A recent report from the US Chamber of Commerce Institute for Legal Reform warns of a growing risk of litigation in Latin America.
By Jaime Mejia
The principal economies of Latin America are reforming their civil law systems, which may instigate a wave of litigation with potential negative consequences for foreign investment and economic growth in the region. That is the main conclusion of two recent reports produced by the Institute for Legal Reform (ILR) within the US Chamber of Commerce, a Washington D.C.-based agency that promotes global trade.
The report Following Each Other’s Lead: Law Reform in Latin America looks into class-action lawsuits in 13 Latin American countries. Another report Class Action Evolution: Improving the Litigation Climate in Brazil , offers an in depth look at legal reforms in Brazil.
According to the ILR, both reports reveal worrying trends in the region, such as the ability to easily instigate lawsuits of questionable merit, creating economic incentives for collective actions, and others that could produce imbalances in the region’s judicial systems.
“The risk we run is creating abuse within the legal systems, which could create problems for private investment”, the ILR’s Vice President for International Initiatives, Scévole de Cazotte told Latin Business Chronicle. According to the ILR, these reports will serve as a warning signal for governments and Latin American citizens that their legal systems may be coopted by abusive litigation. “If …