“Opinion is Power” Managing the Public Risk of Litigation FDCC Annual Meeting La Costa, California July 2005 FDCC Annual Meeting La Costa, California July 2005 Robert H. Bork, Jr. Bork Communication Group Robert H. Bork, Jr. Bork Communication Group

Media Coverage of Litigation is Exploding

Class Actions were the Fastest Growing Media Coverage Source: Institute for Crisis Management

Litigation was THE Big News in 2001 Class Action Lawsuits accounted for 23% of all crisis news in 2001…up from 2% in 1990

Crisis Categories Compared 1990 – 2004 (% of total crises each year) Catastrophes Environmental Class Action Lawsuits Consumer Activism Defects & Recalls Discrimination Executive Dismissal Financial Damages Hostile Takeover Labor Disputes Mismanagement Sexual Harassment Whistle Blowers White Collar Crime Casualty Accidents Workplace Violence

Most Crisis-Prone Industries 2004 Source: Institute for Crisis Management (Ranked by percentage of database) 1. Pharmaceuticals 2. Software Makers 3. Insurance Companies 4. Airlines 5. Health Services 6. Gas/Oil Extraction 7. Telecommunications 8. Supermarkets 9. Banks 10. Auto Manufacturers

Most Crisis-Prone Businesses 2004 Source: Institute for Crisis Management 1. Merck 2. Wal-Mart 3. Enron Corp. 4. SBC Communications 5. Microsoft 6. Parmalot SpA 7. Boeing 8 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 High-Profile, High-Risk Litigation 4 Well-known plaintiff or defendant 4 Controversial allegations 4 Large monetary claims 4 Important legal issues 4 Direct impact on public 4 High degree of public interest 4 Entertainment value 4 Come uppance factor

The Plaintiff’s Lawyers and their Message 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 Message 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: Message 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” “[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 failure to communicate” Source: Institute for Crisis Management

Public 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? 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? 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 Communicate Case management Public perception /customer relations Distracts management /employees Influence investors Discourage other litigation Influence outcomes

Why 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 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 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 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 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 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 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 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 Guilty “‘No comment’ gets you run over in the middle of the road.” – Stephen Jones, defense attorney

“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 BelievableUnbelievable 30% 64%

. 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 BelievableUnbelievable 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. Innocent Guilty InnocentGuilty 10% 66% 27% 45%

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% 41% 27% GuiltyInnocentGuiltyInnocent

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. GuiltyInnocent 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