Law n. 14.905/2024: The New System of Interest and Monetary Adjustment and Its Effects on Judicial Proceedings

Law n. 14.905/2024 introduced significant amendments to the Civil Code regarding monetary adjustment and interest application in judicial and extrajudicial debts. This research analyzes how these modifications affect past and ongoing cases, as well as their impact on contractual relations and civil obligations. The implementation of the new legislation raises questions about retroactivity, legal certainty, and potential economic consequences.

Monetary adjustment and interest have always played a crucial role in obligatory relations, being fundamental for preserving purchasing power and ensuring fairness in contract execution. Law n. 14.905/2024 introduces substantial changes to the Civil Code, affecting how interest and monetary correction are applied in legal relations.

The central issue of this study is understanding how this legislation will influence past and present legal proceedings and its compatibility with constitutional and procedural principles.

Law No. 14.905/2024 and Amendments to the Civil Code

The new legislation establishes clearer guidelines on monetary adjustments and interest, aiming to harmonize judicial interpretation and ensure greater predictability in civil obligations. The main changes include:

The definition of specific indices for monetary correction, reducing judicial discretion.

The standardization of moratory and compensatory interest rates, limiting the imposition of abusive interest rates.

The harmonization of interest application criteria in contractual and extracontractual relations.

Impact on Past and Ongoing Cases

The application of Law No. 14.905/2024 to ongoing and already adjudicated cases raises debates about the retroactivity of its provisions and the principle of res judicata. The tempus regit actum principle suggests that the new legislation should govern only future cases. However, discussions persist regarding its applicability to cases not yet definitively resolved.

Past Cases

For cases already adjudicated and in the execution phase, the application of the new legislation may be questioned based on legal certainty. Retroactive modifications could impact creditors and debtors, altering legitimate expectations regarding debt collection.

Ongoing Cases

In pending cases, the debate concerns adapting correction and interest parameters to the new legislation. Courts may apply the new law from its effective date, even to previous debts, provided fundamental principles of intertemporal law are respected.

Practical Implications

Law No. 14.905/2024 may benefit both the creditor and the debtor, depending on how interest and monetary adjustments were modified compared to the previous system.

Possible Benefits for the Creditor

Greater predictability and legal certainty – Standardized interest rates may prevent interpretative maneuvers that unjustly reduced owed amounts.

Reduction of judicial disputes – Clearer definitions of monetary correction and interest criteria may expedite compliance with judicial decisions, avoiding disputes over applicable indices.

Protection against inflationary loss – If monetary updates establish more advantageous indices than previously applied, creditors may receive better-adjusted and corrected credit.

Possible Benefits for the Debtor

Limitation of abusive interest rates – If the new law restricts excessive interest charges, the debtor may pay a lower amount than under the previous system.

Potential retroactive effect – If courts rule that the new legislation applies to past cases, the debtor may request a review of calculations, reducing the total debt.

Greater clarity in calculations – The new regulation may prevent unfavorable interpretations that previously led to excessive charges for debtors.

The standardization of monetary updates and interest rates affects both creditors and debtors, particularly in long-term contracts and enforcement litigation. The main effects include:

Greater predictability for contracts and enforceable titles.

Reduction of judicial disputes over correction indices.

Potential revision of pending rulings if courts apply the new legislation immediately.

Conclusion

Law n. 14.905/2024 represents progress in providing greater predictability for monetary adjustment and interest rules, reducing legal uncertainty. However, its application to past and ongoing cases requires careful interpretation to avoid violations of legal certainty and acquired rights.

The debate on the retroactivity of the rule will remain relevant, requiring judicial interpretation to ensure the coherence of the Brazilian legal system.