By Camillo Giamundo

Amendments to the Administrative Misconduct Law (Law 8,429/92) face judicial challenges regarding retroactive application, especially in cases of conviction without proof of willful misconduct, highlighting the need to review initial complaints to guarantee defense rights.

Almost 3 years ago, the Administrative Misconduct Law was significantly affected by amendments introduced by Law 14,230/21, and it can be seen that, although harshly criticized — with some of them suspended by the STF — certain substantive and procedural issues are being ignored by the courts hearing misconduct actions.

In its ruling on General Repercussion Topic 1,199, the STF held that the new provisions are generally non-retroactive, except for actions alleging negligent acts of misconduct committed under the previous wording of Law 8,429/92, provided there is no final conviction.

On this point, even if the action is at the appeal stage before the higher courts, the effects of the amendments must be extended, especially to correct actions in which there was a conviction without effective proof of willful misconduct by the public official or private party. This review is easier when the misconduct action was based on the former — and now revoked — item I of art. 11 of Law 8,429/92

Even so, there are situations in which the claim is based cumulatively on other provisions, but without properly indicating and correlating the offenses with the conduct alleged, as required by art. 17, §10-D of the Administrative Misconduct Law. In cases like this, the initial complaint in the misconduct action must be reviewed to bring it into line with the new LIA provisions and allow defendants to fully exercise their rights to adversarial proceedings and a full defense.

Another point that has generated considerable debate and controversy concerns asset freezes. Until the 2021 legislative amendment, the STJ’s settled understanding was that the requirement of danger in delay underlying an asset freeze was presumed, that is, it did not depend on concrete proof or any indication that the defendant was dissipating assets. As a result, most administrative misconduct actions were accompanied by an asset freeze for an amount covering not only the alleged damage to the public treasury but also, immediately, the amount of a supposed and uncertain future fine that might be imposed at judgment, without any deeper and more concrete evidentiary exercise showing the need for such an extreme measure at the very start of a misconduct action — which usually takes years to be decided, at least at first instance. It would be more appropriate for the case to proceed and for the adversarial process to unfold, so that the judge can be better persuaded of the need for and timeliness of measures necessary to secure the outcome of a possible future conviction.

On this point, the change introduced by Law 14,230/21 was welcome, requiring a showing, in the specific case, of a danger of irreparable harm or of risk to the useful outcome of the proceeding, provided the judge is convinced of the likelihood of the acts described in the initial complaint based on the respective evidence (art. 16, §3); the amount frozen may not exceed the amount indicated as damage to the public treasury or unjust enrichment (art. 16, §5), and the amount of any civil fine may not be added (art. 16, §10), as was previously the case.

These legislative changes are necessary and very appropriate, since asset freezes are commonly imposed at the start of the misconduct action, whereas the civil fine can only be determined upon actual conviction at the end of the action, once the evidentiary phase has been completed and all mitigating and aggravating circumstances have been weighed. It is not fair to impose it at such a preliminary and initial stage of the proceeding, as had always been the case.

The controversy arose from the understanding that, in actions filed under the former wording of Law 8,429/92 in which assets had already been frozen, the act could not be reviewed under the new law, on the grounds that procedural rules are non-retroactive.

This discussion was taken to the STJ under Topic 1,257, which addresses whether the new law can govern provisional relief freezing assets, including the possibility of including the amount of a possible civil fine. Cases involving this matter are stayed until the STJ defines the understanding to be applied generally.

In addition to the review of the subjective element of intent, which must be present in the allegations made in misconduct actions, and the controversial debate on freezing defendants’ assets, the Judiciary has often failed to apply art. 17, §10-C of the LIA, which expressly requires that, after the answers and replies are filed, the judge issue a decision precisely indicating the classification of the act of administrative misconduct attributable to the defendant, without changing the main fact and the legal classification presented by the Public Prosecutor’s Office, so that only then do the parties specify the evidence they intend to produce.

Not only in administrative misconduct actions, but also in ordinary proceedings, it is not uncommon for procedural orders to be issued assigning to the parties the task of indicating the disputed points on which evidence should focus and the burdens each litigant bears.

Although the 2015 Code of Civil Procedure introduced a cooperative relationship between the parties, removing the judge from the role of the ultimate recipient of evidence, it is the judge who presides over and conducts the proceeding, and it is for the judge — not the parties — after the pleadings phase, to resolve pending procedural issues and define the factual questions on which the evidentiary activity will focus.

In administrative misconduct actions, whose sanctions and effects seriously affect the rights of public officials and private parties, the State’s commitment must be even more relevant and indispensable, avoiding the continuation of clearly unfounded and inappropriate claims that may tarnish the reputation of innocent people.

In conclusion, the amendments introduced by Law 14,230/21 represent a significant step toward effectiveness and fairness in administrative misconduct actions, establishing stricter requirements for asset freezes and requiring proof of intent in the allegations against defendants, so that the new wording of the LIA seeks to guarantee the rights to adversarial proceedings and a full defense, fundamental in a democratic State governed by the rule of law. However, the correct application of these legal provisions involves facing challenges, requiring a careful review of pending actions so that the changes are effectively implemented. Only then will it be possible to protect the integrity of the judicial system, ensuring that severe sanctions are applied fairly and on solid grounds, favoring legal certainty and the effectiveness of justice and the law.

Originally published by Migalhas (in Portuguese).