With the entry into force of the Labor Reform in 2017, there was a significant reduction in the number of labor lawsuits. This development was mainly due to the provision that even recipients of legal aid could be held liable for the payment of attorneys’ fees and expert fees arising from losing the case, using the credits obtained in the proceeding itself.
This scenario contributed to a reduction in labor liabilities, since many employees began to act more cautiously in view of the risk of bearing significant costs if their claims were dismissed. As a result, there was a more selective approach on the part of attorneys, with a decrease in the filing of mass claims that had previously been brought under the assumption that there was no financial risk involved.
However, in 2021, when ruling on Direct Action of Unconstitutionality (ADI) No. 5766, the Federal Supreme Court declared unconstitutional the provisions of the Labor Reform that required recipients of legal aid to pay expert and attorneys’ fees using credits obtained in the lawsuit itself. As a result, the immediate financial risk was significantly reduced, since any such obligation became subject to a suspensive condition of enforceability.
The decision, based on the protection of the weaker party and on the guarantee of access to justice provided for in article 5, item XXXV, of the Federal Constitution, broadened access to the Judiciary. In this new context, there was an increase in litigation, a phenomenon that, in practice, represents a substantial reduction in the economic cost of litigating for the claimant.
In addition to this factor, there was the judgment of Theme 21 by the Superior Labor Court, in December 2024, which further expanded access to legal aid. It was established that employees with income of up to 40% of the ceiling of the General Social Security Regime are automatically entitled to the benefit, while, for those with higher earnings, a simple declaration of economic insufficiency is sufficient for its granting.
As a result, recent data indicate that Brazil has begun to record a significant increase in the number of labor lawsuits. In 2025, the first instance of the Labor Court received approximately 2.3 million new cases, representing an increase of about 8.5% compared to 2024 (2.13 million). This volume makes 2025 the year with the highest number of filings in the period following the Labor Reform.
From the perspective of the economic analysis of law, it can be seen that the change in the cost-shifting regime directly affects the incentives to litigate. The reduction of financial risk for the claimant tends to encourage the filing of lawsuits, including those with a lower likelihood of success, since the expected cost of bringing the claim becomes significantly reduced.
This increase in litigation is not limited to the judicial sphere, but has repercussions throughout the economy, forcing companies to incorporate legal risk into their operating costs. In practice, the rise in accounting provisions drains resources that could be directed to new investments, hiring, or passing on real gains to employees, thereby affecting the competitiveness of the business.
This is not about restricting workers’ access to justice, but about seeking balance in the system. Mechanisms that discourage unfounded claims help protect legitimate rights and contribute to building a more efficient and sustainable Judiciary.
In this new scenario, a reactive stance is no longer a viable option for companies. If the current legal environment has reduced the economic risk for claimants, it is up to companies to establish their own protective barriers.
In this context, labor counsel takes on a strategic role in the companies’ decision-making framework, acting preventively, with a focus on risk mitigation, strengthening compliance practices, and building a legally secure organizational environment.
More than merely responding to claims, the goal is to reduce their likelihood of occurrence — while at the same time protecting the financial health and reputation of organizations.