By Camillo Giamundo and Brenda Monticelli

Since the misconduct law seeks to protect the public treasury and public assets, with the aim of prosecuting and convicting those who have caused damage to the administration, become unjustly enriched or violated its principles, it is sound and advisable to provide for measures that guarantee compensation for the loss caused, such as freezing assets and amounts in administrative misconduct actions.

An asset freeze is a concrete and effective mechanism to ensure the recovery and redress of damage that may have been caused to the public treasury or public assets, given the need to observe the principle of the supremacy of the public interest over the private interest and the principle of the non-disposability of public interests.

However, what must be firmly questioned is the indiscriminate use of the possibility of provisionally freezing assets and amounts, without observing criteria and requirements that truly justify such a drastic measure with very serious effects on the defendants in these actions, since the amounts involved are often very large and may cause irreversible consequences for the defendants.

In this regard, Law 14,230/21, which amended several provisions of the Misconduct Law, introduced extremely important changes to the interpretation of provisional relief in misconduct actions, establishing new requirements for granting it. It should be stressed that these requirements were essential to bring into line a case law understanding that had long been the subject of questions and criticism.

The asset freeze was already provided for in the former wording of Law 8,429/92, authorizing it in cases where the alleged act of misconduct resulted in harm to public assets or the unjust enrichment of the accused.

Considering the subsidiary application of the CPC to the misconduct law, it is important to highlight the two types of provisional relief in the procedural code: urgent relief, intended to eliminate the danger of serious and hard-to-repair damage, requiring proof of a reason capable of compromising the effectiveness of the final relief (periculum in mora), as well as the plausibility of the right alleged (fumus boni iuris); and evidence-based relief, based on the existence of a situation that authorizes immediate and provisional protection of the alleged right asserted in the complaint, where there is no risk of serious or hard-to-repair damage, but circumstances justify reversing the consequences of the delay of the proceeding normally borne by the plaintiff.

Of the definitions above, it is undoubtedly urgent relief that came to serve as the precautionary measure under Law 8,429/92 for asset freezes. However, the legislation made no mention of the specific requirements of provisional urgent relief, namely: the likelihood of the right and the danger of harm or risk to the useful outcome of the proceeding, set out in art. 300 of the CPC.

The lack of reference to the specific conditions of urgent relief raised major doubts about how the precautionary measure provided for in art. 7 of Law 8,429/92 should be applied.

At the time, seeking to resolve the problem, the STJ settled the issue through Repetitive Appeal Topic 701 in REsp 1,366,721/BA, holding that periculum in mora could be presumed, requiring only evidence that the act of misconduct had been committed.

However, this understanding revealed a major disparity between the serious measure of freezing assets and dispensing with the urgency requirement.

This is because a decision freezing assets can seriously compromise the economic and financial situation of individuals and companies, so applying a presumption of guilt to justify such drastic measures was inconsistent with the constitutional guarantee of the presumption of innocence — even more so at the start of a lawsuit, before proper adversarial proceedings and a full defense.

This understanding regarding the presumption of periculum in mora was only broken with the recent amendments to the misconduct law, especially those introduced by article 16, §3 and §8.

It can be said that these paragraphs represent the legislator’s response to the previously consolidated case law, ruling out the presumption of damage and danger in delay and instead requiring effective proof, in the specific case, of a danger of irreparable harm or risk to the useful outcome of the proceeding.

These amendments appropriately highlight the requirements for freezing assets and, in short, served as a true link between the provisional relief applicable in misconduct actions and the CPC rules.

In this context, there is no longer any doubt that effective proof of the periculum in mora requirement is indispensable, shown by the danger of irreparable harm or risk to the useful outcome of the proceeding. This requirement must now be properly demonstrated and translates into qualified conduct of dissipating assets, a burden to be met by the plaintiff, leaving no room for divergent interpretations.

As seen, Law 14,230/21 brought long-awaited changes to asset freezes in administrative misconduct actions, notably the innovation requiring proof of urgency, based on demonstrating the danger of irreparable harm or risk to the useful outcome of the proceeding.

The innovations were so significant that they create a strong link between the CPC rules and the misconduct law — a link that was able to break the previously consolidated case law that treated periculum in mora as merely presumed, which did not seem correct and was inconsistent with constitutional guarantees.

The fact is that the pursuit of justice and the fight against administrative misconduct cannot result in disregarding the basic legal and constitutional guarantees of individuals and companies, at least until adversarial proceedings have taken place and the evidence is firm and concrete enough to indicate that the act of misconduct was committed.

Published by Migalhas (in Portuguese).