## Notes from 25 May 2025 [[2025-05-24|← Previous note]] ┃ [[2025-05-26|Next note →]] The AGU's billion-real windfall **_Honorários de sucumbência_**, known as _losing-party legal fees_, are a mechanism in Brazil’s legal system by which the losing side in a court case is required to pay an additional fee to the lawyers of the winning side. While common in some civil law jurisdictions, Brazil applies this rule even in lawsuits against the state. Since 2016, a law ([Lei 13.327/2016](https://www.planalto.gov.br/ccivil_03/_ato2015-2018/2016/lei/l13327.htm)) has allowed public-sector lawyers (such as those representing the federal government) to pocket these fees as personal income, on top of their regular salaries. This means that if a retiree sues the **INSS** (Brazil’s social security agency) and loses, they may end up having to pay extra to the very government lawyer who defended the denial of their pension. And even when the INSS only partially wins (say, by reducing the amount retroactively owed to the retiree) its lawyers still receive a cut based on the amount “saved.” In 2024 alone, over **[R$ 1.1 billion](https://www1.folha.uol.com.br/colunas/romulo-saraiva/2025/03/o-que-fazer-com-tanto-dinheiro-do-inss.shtml)** in such fees were collected just in the first seven months, with much of the revenue stemming from INSS-related litigation. Because the INSS is the most sued entity in Brazil’s judiciary, its legal department has become a goldmine for honorários. Reports suggest that some lawyers routinely exceed the constitutional monthly salary cap of R$ 46,000 when their base pay and bonuses are combined. All of this money is pooled into a **central fund** - the **_Honorários Fund_**, overseen by the **_Honorários Management Council (CCHA)_** within the AGU. This body is responsible for managing and distributing the proceeds among federal government lawyers, including **active and retired members** of the AGU, the National Treasury, federal agencies, and the Central Bank. The fund is **federal-only**: it does **not** include lawyers working for state or municipal governments, who may have separate arrangements. Remarkably, even **[retired lawyers](https://anpprev.org.br/redactor_data/20230712171114_manual-acordo_ccha.pdf) who had no direct involvement in the cases being litigated** are entitled to receive a share of the proceeds, thanks to internal arrangements that redistribute funds within the careers. Although it is formally managed by a "diverse" council, the CCHA is composed primarily of representatives from the very careers (corps) that benefit from it. This is a manifested **conflict of interest**, with limited external oversight. Even the Federal Court of Accounts (TCU) has questioned the legality of certain benefits created by the council, including a “13th month” bonus and a special monthly health stipend of up to R$ 3,500. Its a distortion of civil service ethos: instead of serving the public interest, it rewards bureaucratic insiders with a parallel stream of income based on citizens’ legal defeats.