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Date: August 31, 2020
Posted by: CPDMA Team

The legal uncertainty of the business scenario and the decrees in the Covid-19 pandemic

It is undeniable that the pandemic caused by Covid-19 had a global reach, including beyond the field of health. In Porto Alegre it would be no different: to combat the proliferation of the virus, since March 2020, both the Federal, State and Municipal Governments have taken legal measures to regulate the new “normal”. 

This means that state and municipal decrees have been released by governments at a speed that society, and especially the business scenario, does not have the structure to support. Such speed stems from the instabilities caused by the number of people infected in attention to the capacity of the health system in Porto Alegre. 

It so happens that the instability that generates the issuance of new decrees does not always reflect the necessary efficiency inherent to legal provisions, which has been collapsing commerce and the life of many companies. This essay does not intend to reject the importance of government action, but rather to consider that caution needs to be part of the contingency plan in order to ensure that, after the pandemic is controlled, we are not scorched earth in our economy.

In practical terms, since March 16, 2020, the city of Porto Alegre has edited 15 [1] Municipal Decrees, which greatly subjects the business scenario to the instability of the legal text, thus causing real legal uncertainty, as the motivation for restricting economic activities sometimes it is guided by the proliferation of the virus, sometimes by a supposed risk to public activity. This situation has been analyzed by the Judiciary [2] which, in many cases, derogates the content of the Decree in favor of social reality.

Legal uncertainty cannot be part of the government's list of legal measures, because on one day the Decree releases economic activities and on the other, in addition to restricting them, it also imposes a pecuniary penalty on the entrepreneur in case of non-compliance, believing that such a penalty, of a symbolic, will reduce contamination rates. It is illogical, as it is certain that large agglomerations continue to occur due to the population's need to work and travel by means of public transport, for example. 

[1] https://prefeitura.poa.br/coronavirus/decretos

[2] Writ of Mandamus filed against the Municipality of Porto Alegre: 5013982-88. 2020.8.21.7000: As stated in the Provisional Interdiction Notice itself (Event 1 - OCT12), the petitioner carries out an economic activity of trade and repair of bicycles, that is, an activity permitted, pursuant to items XXXIV and XXXVII of art. 11 of Decree No. 20.534/20. Furthermore, given the exceptional situation that plagues the Rio Grande do Sul scenario as a result of the pandemic caused by COVID-19, the bicycle, a vehicle recognized by the Brazilian Traffic Code, appears as a fundamental means of transport, above all, due to the increase in service of delivery of goods, such as food and medicines, essential to meet the urgent needs of the community. In addition, there is no mention of a risk to the public interest, since the petitioner undertakes to comply with all the recommended precautions for the preservation of the health of its employees and customers, assuming the commitment to prevent the spread of the contagion of the coronavirus. In these terms, in view of the requirements of articles 995 and 1,019, item I, of the Code of Civil Procedure, I grant the request for suspensive effect, to render Infraction Notice No. 496915 ineffective, observing all precautionary measures provided for in art. 4 of State Decree No. 55. 154/20202 and in art. 22 of Municipal Decree No. 20.534/20.

Source: Karen Lucia Bressane Rubim, attorney at Cesar Peres Dulac Müller.


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