The Special Court of the Superior Court of Justice (STJ) may reconsider the application of the Selic rate to civil debts.

The Special Court of the Superior Court of Justice (STJ) may reconsider the application of the Selic rate to civil debts. With the basic rate at its lowest historical level, the ministers of the 3rd Panel debated this possibility on Tuesday, in a judgment that discussed the application of default interest on compensation to be paid by two engineers.

The Selic rate is currently at 2%. The single-digit level for the index, defined by the Central Bank, is recent in Brazil. In September 2008, when the Special Court of the Superior Court of Justice (STJ) decided on the application of the Selic rate to civil debts—which would encompass both monetary correction and default interest—it was at 13.75%.

The central point of the discussion is article 406 of the Civil Code. This provision stipulates that default interest, when not agreed upon, will be fixed at the rate in effect for the payment of taxes owed to the National Treasury.

In September 2008, the Special Court decided, in a repetitive appeal (REsp 727842), that the rate referred to in article 406 is that of the Special System of Settlement and Custody (Selic). The other option in the judgment was the application of default interest of 1% per month — at the time, if annual, lower than the Selic rate.

With the reduction in the basic interest rate, the issue was once again discussed in the 3rd Panel of the Superior Court of Justice (STJ). In this case, two engineers requested the reversal of a decision by the Court of Justice of Paraná (TJ-PR) to apply the Selic rate to the compensation to be paid by them (Resp 1846819).

Interest is charged in a lawsuit that ordered them to carry out repairs on a residence — the obligation to perform was later converted into damages (REsp 1846819). The TJ-PR (Court of Justice of Paraná) had set a rate of 1%, based on articles 406 of the Civil Code and 162 of the Tax Code.

The rapporteur, Minister Paulo de Tarso Sanseverino, had already voted in favor of the request. The trial resumed with the dissenting opinion of Minister Marco Aurélio Bellizze, who followed the rapporteur.

In his vote, however, Minister Moura Ribeiro raised doubts about the application of the Selic rate. "It's a political rate; soon it will be at zero, and we won't be able to calculate default interest anymore," he stated. Despite this consideration, he didn't want to request a review because "it wouldn't change the result," which was already decided by a majority in favor of the basic interest rate.

The rapporteur agreed that the increasingly low Selic rate is a problem that the Special Court will have to address. "It was a repetitive case from Minister Teori Zavascki, right when the repetitive cases began, and I agree that very soon we will have to select a case to try to review. Otherwise, the amounts will become insignificant," he said.

According to the rapporteur, default interest of 1% per month is quite high, but at the same time it encourages the parties to quickly settle debts or reach a good agreement, avoiding delaying the process. "Let's wait for a good case; I think it's a good issue to take to the Special Court as a review of that repetitive case."

Minister Ricardo Villas Bôas Cueva stated that the issue is very complex. "For a long time, the Selic rate was avoided by individuals; today it's the opposite," he said. He agreed that 1% per month is very high and that a middle ground needs to be found. "The best investment that exists today is to let a stock run its course."

The Third Panel may refer a case to the Special Court for judgment on the matter. There was a recent attempt by the Fourth Panel to have the matter judged by the Special Court, in an appeal under the rapporteurship of Minister Luis Felipe Salomão.

The rapporteur at the time proposed changing the understanding and using as an index for monetary correction and default interest the provision of article 161, paragraph 1, of the National Tax Code (1% interest per month), in addition to monetary updating based on an official table adopted by the courts of origin.

On the merits, the vote was initially followed by Minister João Otávio de Noronha. However, for procedural reasons, the matter was returned to the 4th Panel. The ministers considered that the issue of the applicable index was not included in the appeal and, therefore, should only be analyzed by the full panel.

“The issue could return to the Special Court under the argument that the rate is too low,” says Marcus Vinicius Vita, partner at Wald, Antunes, Vita, Longo e Blattner Advogados. According to the lawyer, however, the option of using the basic interest rate is appropriate and presupposes that there will be variation. “The concern [about the low percentage] is valid, but it's part of the dynamics of the rate.”

The lawyer understands that default interest cannot be viewed as a financial investment. "That's not its purpose," he says. According to him, the legislator's intention was for debts to the Federal Government to mirror other debts in general, as per article 406 of the Civil Code. "If there were a simple monetary correction [IPCA, for example] plus 1% interest, it would create an asset, and the judicial debt would be a source of profit."

According to lawyer Cristiane Romano, partner at the law firm Machado Meyer Advogados, the review of a repetitive precedent pits legal certainty against the speed at which the world changes—in this case, a correction index. The lawyer is not against the review, but argues that it should be done with criteria and caution, in exceptional situations. "If interest rates rise later, will they change the repetitive precedent again?"

“This proposition is absurd, a thesis of large debtors,” states Walter de Moura, a lawyer representing the Brazilian Institute for Consumer Protection (Idec). Article 406 of the Civil Code mandates the use of the Selic rate, he adds, and this system must be maintained. “Changing the jurisprudence would be a ploy to alter the index while it is low. Soon the Selic rate will return to normal and it will be too late.”

Source: Valor Econômico