"opinion is power" managing the public risk of litigation
TRANSCRIPT
““ Opinion is Power”Opinion is Power”Managing the Public Risk of LitigationManaging the Public Risk of Litigation
FDCC Annual MeetingLa Costa, CaliforniaJuly 2005
Robert H. Bork, Jr.Bork Communication Group
Media Coverage of Litigation Media Coverage of Litigation is Explodingis Exploding
Class Actions were theClass Actions were theFastest Growing Media CoverageFastest Growing Media Coverage
1990-19981990-1998
30%
100%
122%
0% 20% 40% 60% 80% 100% 120% 140%
Consumer Action
Defects & Recalls
Class Action
•Source: Institute for Crisis Management
Litigation was THE Big News in 2001Litigation was THE Big News in 2001
2%
23%
0%
5%
10%
15%
20%
25%
1990
2001
Class Action Lawsuits accounted for 23% of all crisis news in 2001…up from 2% in 1990
Crisis Categories Compared 1990 – 2004 Crisis Categories Compared 1990 – 2004 (% of total crises each year)(% of total crises each year)
4.05.011.03.8Workplace Violence
6.07.04.04.8Casualty Accidents
17.017.014.020.4White Collar Crime
1.01.01.01.1Whistle Blowers
2.02.01.0.4Sexual Harassment
14.012.011.024.1Mismanagement
12.09.011.010.3Labor Disputes
1.01.01.02.6Hostile Takeover
4.03.03.04.2Financial Damages
2.02.01.01.3Executive Dismissal
5.05.03.03.3Discrimination
6.01 4.013.05.4Defects & Recalls
5.05.02.02.8Consumer Activism
13.010.020.02.2Class Action Lawsuits
3.02.02.07.8Environmental
6.04.04.05.5Catastrophes
200420032002 1990
Most Crisis-Prone IndustriesMost Crisis-Prone Industries2004 2004
•Source: Institute for Crisis Management
(Ranked by percentage of database)1. Pharmaceuticals2. Software Makers3. Insurance Companies4. Airlines5. Health Services6. Gas/Oil Extraction7. Telecommunications 8. Supermarkets9. Banks10. Auto Manufacturers
Most Crisis-Prone BusinessesMost Crisis-Prone Businesses2004 2004
•Source: Institute for Crisis Management
1. Merck 2. Wal-Mart3. Enron Corp.4. SBC Communications5. Microsoft6. Parmalot SpA7. Boeing8 Computer Assoc. Int.
8. Computer Assoc. Int.9. HealthSouth Corp.10. Chiron Corp.11. Pfizer Inc.12. Fannie Mae 13 Oracle Corp.14. Merrill Lynch & Co.15. People Soft, Inc.
(Ranked by number of database records)
Typical Characteristics of Typical Characteristics of High-Profile, High-Risk LitigationHigh-Profile, High-Risk Litigation
✔Well-known plaintiff or defendant
✔Controversial allegations
✔Large monetary claims
✔Important legal issues
✔Direct impact on public
✔High degree of public interest
✔Entertainment value
✔Come uppance factor
The Plaintiff’s Lawyers and their The Plaintiff’s Lawyers and their Message and MethodsMessage and Methods
“Tort attorneys are generally portrayed as lone, idealistic Davids taking on massive, team-counseled corporate Goliaths… . But most lawsuits are managed with the ruthless efficiency of Wal-Mart’s distribution network. ...
The Plaintiff’s Lawyers and their The Plaintiff’s Lawyers and their Message and MethodsMessage and Methods
“...[C]oalitions of class-action law firms can mount sophisticated, multipronged legal, political, and mass-media attacks against entire industries--and can drive multibillion-dollar companies into bankruptcy. ''These people fly around in bigger jets than we do,'' says Robert W. Pike, EVP and Secretary at Allstate.”
The Plaintiff’s Lawyers: The Plaintiff’s Lawyers: Message and MethodsMessage and Methods
“The big payoff, considered one of the largest discrimination settlements ever, has prompted criticism by Coke executives. While the company wouldn't comment on the attorney's tactics, executives at the company privately fumed during the litigation that Mr. Mehri was attempting to try the case in the media, rather than the courts…
. -- The Wall Street Journal, Nov. 21, 2000 article about his $193 million race discrimination settlement with Coke
Cyrus Mehri
““A multifaceted approach”A multifaceted approach”
“[Mehri] concedes that his work with the media helped build pressure against Coke, but says there is nothing wrong with that. ‘If you're going to take on a corporate power, you have to take a multifaceted approach,’ he says. ‘You can't stay in the four corners of litigation.’”
Cyrus Mehri
““What we’ve got here is What we’ve got here is failure to communicate”failure to communicate”
•Source: Institute for Crisis Management
Judicial 28%
Activists5%
Company Executives
7%
Customers9%
Employees9%
Consumers4% Government
28%
Union Leaders10%
Public OpinionPublic Opinion
Don’t be surprised that…
76 percent of the 1,000 potential jurors polled agreed with the statement, "Executives of big
companies often try to cover up the harm they do”
28 percent said that they could not be impartial if a corporate executive
were a party to a lawsuit.
Source: 2000 NLJ-DecisionQuest Juror Survey
What is Litigation?What is Litigation?
Litigation is about telling
a persuasive story to a judge and a jury
What is Litigation Communication?
Litigation communication is making sure that story is
heard, is understood and is remembered by key
audiences both outside and ultimately inside the
courtroom.
Why communicate?Why communicate?
62% believe business places profits over public needs.
62% believe “no comment” about lawsuit means business is covering-up wrong doing.
48% less likely to buy company’s products when company is accused of wrong doing in lawsuit.
40% believe business is “guilty” after lawsuit is filed.
Source: Opinion Research Corp., 1998
Why You Must CommunicateWhy You Must Communicate
Case management
Public perception /customer relations
Distracts management /employees
Influence investors
Discourage other litigation
Influence outcomes
Why You Must CommunicateWhy You Must Communicate
By communicating you can lessen the impact of
litigation on your brand and even reap some benefits
““An essential part of the legal An essential part of the legal strategy”strategy”
"High-risk, high-profile legal engagements cannot be handled responsibly or effectively these days without
consideration for the political and public relations environments in which these legal crises unfold. An essential part of the legal strategy is insuring that decision-makers, including the public, perceive the client's message and actions in the most favorable
light.”
Theodore B. Olson
Case StudyCase Study
Problem Solution
Develop minority and business allies
Raise client’s positives / Transformed a potential “Omigod!” story into a “So what?” story
Inoculation strategy
Client fears Title VII class action
Has good record but no public awareness
Facing firm specializing in discrimination cases
Case StudyCase Study
Problem Solution
Give appellate court no way out
Class action involved thousands of plaintiffs
Verdict against client for billions
Client involved in an accident
Bring elite public opinion to bear
Define in national and local media as a black eye for the state
Case StudyCase Study
Problem Solution
Play David to its Goliath
Provide experts and allies to put issues in context
Clearly define issues of law and marketplace
Adversary’s size and wealth make litigation difficult
Clients face unfair competition in markets from mammoth, bullying adversary
Case StudyCase Study
Problem Solution
Defend the product
Change the terms of the debate/Tell alternate story
Put loss in context/Alternate story
Client loses big verdict
Accident is catastrophic
Vulnerable on unrelated issues
Case StudyCase Study
Problem Solution
Be willing to play hardball when you have the facts
Know your product and get the facts
Investigative report alleges CK truck to be prone to fires in side impacts
No Comment Means You’re GuiltyNo Comment Means You’re Guilty
40 percent of those polled believe that a company is guilty when it is sued.
62 percent believe the company is guilty when it says “No comment.”
Source: 1998 Market Opinion Research
No Comment Means You’re GuiltyNo Comment Means You’re Guilty
“‘No comment’ gets you run over in the middle of the road.”
– Stephen Jones, defense attorney
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
“We are not responsible for this fatality and will defend the case in a court. Until then, our policy is no comment.”
The company isn’t believed
Believable Unbelievable
30%
64%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
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90.00%
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The property owner is responsible for this tragedy by allowing a 7-year-old child to run a powerful lawn mower without any supervision. Abusing the courts to
collect money just makes the tragedy worse.
The company is believed
Believable Unbelievable
76%
20%
Lawnmower maker knew the widget was prone to damage when blade runs over tree roots and
concealed risk.
The company did not respond to repeated requests for comment.
Company called the accident a tragedy and denied flaws in their design, saying that lawn mower should not have been used by drunk operator over exposed,
thick tree roots.
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
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10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
InnocentGuilty InnocentGuilty
10%
66%
27%
45%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
Widget failed resulting in death of vehicle occupant
The company maintains that they have no evidence of widget failure
risk.
The company called the suit an outrageous case of plaintiffs’ lawyers
using a tragedy to collect legal fees. No widget could withstand an impact from
a drunk driver at 80 miles-per-hour.
28%
45%
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
41%27%
Guilty Innocent Guilty Innocent
Lawsuit by woman who suffered broken rib from air bag after collision.
Company officials refused comment on pending lawsuits.
Company said the woman credits the airbag for saving her life. The lawsuit is motivated by money. It’s wrong to sue for an air bag that worked perfectly and
saved lives.
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
100.00%
0.0%
10.0%
20.0%
30.0%
40.0%
50.0%
60.0%
70.0%
80.0%
90.0%
100.0%
Guilty Innocent
29%37%
Guilty Innocent
12%
71%
In Conclusion…What Works
Aggressively asserting the facts
Silence reinforces presumption of guilt Controlling the debate
Responding to plaintiffs charges without asserting your key messages allows them to set the agenda
Advocating personal responsibility
The public is willing to hold people responsible for their actions if they have the facts