The way the company manages contingencies has become a thermometer of business maturity; The legal one dialogue with controllership, audit and compliance, with an integrated view of risks
For a long time, litigation was seen only as an inevitable burden: a liability to be accounted for, monitored and reduced whenever possible. This limited reading has caused many companies to stop litigation with a fertile field of intelligence capable of turning provisions into strategic decisions and reinforcing corporate governance.
Today, in an environment in which investors, regulatory agencies, and board advice require predictability and transparency, the way the company manages its contingencies has become a thermometer of business maturity. It passed the dialogue with controllership, eoffering an integrated view of risks and opportunities.
From liabilities to management assets
O CPC 25convergent to IAS 37 of international accounting standards (IFRS), inaugurated a cultural change. It is not enough to throw values into balance: it is necessary to justify probabilities of loss based on consistent evidence. This pattern reinforces the level of disclosure and the need for robust documentation to support the information presented to the market.
In practice, recent experiments show that companies that analyze clusters of labor lawsuits with a high rejection rate can substantiate secure provision adjustments and release previously immobilized capital. In parallel, the analysis of the root causes of demands, such as outdated internal policies, weaknesses in HR procedures or poorly calibrated contracts, provides valuable inputs to mitigate future risks. This is where litigation is no longer a portrait of the past and guide strategic decisions.
Accounting and Financial Impact
Under CPC 25 and IAS 37 (IFRS), the challenge is not just counting, but qualifying, reviewing and consistently adjusting provisions. This process makes room for legal strategies that talk directly with finance: reducing provisions safely improves liquidity, strengthens EBITDA, and expands predictability to investors and creditors.
Funds and analysts already observe how companies treat their contingencies. In due diligence or audits, it is not uncommon for unexpected provision adjustments to make mergers, acquisitions or emissions in the capital market unfeasible. The way litigation is treated is no longer technical detail: it is a central element in attractiveness and valuation.
The case of labor portfolios
In volume labor desks, the connection between legal and accounting is even more sensitive. The inconsistency in risk classification can inflate provisions in hundreds of millions, distorting Ebitda, pressing covenants banking and even compromise valuation in M&A operations.
Proper calibration requires legal and controlling integration through successful jurimetry. This means using decision history, such as rejection rates, second instance reversals, court profile and TRTs, to parameterize probabilities. This practice gives more accuracy to the calculations, releases capital previously, and strengthens the company’s credibility to auditors, investors and creditors.
The look of the CFO and the Council
For the CFO, contingencies are not just explanatory notes, but factors that directly impact the credit rating, access to financing and the company’s financial narrative. Administration councils, in turn, require reports that connect legal risk to tangible metrics such as cash predictability, operational margin and reputation with stakeholders.
In this scenario, the well -structured legal legal becomes a translator: it converts the complexity of disputes into financial language, dialogues with auditors and reinforces the credibility of reported information. This reduces the likelihood of unforeseen adjustments and strengthens market confidence.
Governance and audit as competitive differentials
The integration between legal and audit, internal and external, is an essential step. Sharing calculation methodologies, risk assumptions and clustering criteria strengthens the company’s position in the market. More than meeting regulatory requirements, this movement avoids weaknesses that can compromise strategic operations.
In practice, companies that integrate governance and litigation give to the market a message of maturity: they are prepared to manage risks in a transparent way, reduce volatility and anticipate necessary adjustments. This is not just protection, it is competitive differential.
This alignment, however, is not restricted to the internal legal. It requires the law firms partners to adopt the same logic in the elaboration of their reports. It is not enough to classify risks in a generic way; It is necessary to translate legal probabilities into accounting metrics that dialogue with CPC 25, IAS 37 and IFRS. As an internal legal, external offices, audits and councils speak the same language, the company conveys consistency and reinforces the credibility of its financial statements.
And here comes an inevitable reflection: Are the companies’ external partners prepared to deliver reports that dialogue with the board and the market?
The provisioning criterion, even if you observe CPC 25 and IAS 37, is not static. It requires in -depth accounting knowledge, mastery over portfolio behavior and ability to track changes arising from preventive analysis. Each adjustment directly impacts the numbers and, therefore, should be read not only as a regulatory obligation, but as a management tool that anticipates risks and projects consequences. It is in this movement that labor litigation is no longer unchanging passive and consolidated as a strategic asset of governance, financial sustainability and business value generation.
*This text does not necessarily reflect the opinion of the young Pan.
