The first wave of coronavirus-related lawsuits has already hit the judicial system, and more are expected to come. Decisions made leading up to the pandemic and amid the uncertainty of the global health crisis will soon be scrutinized in courtrooms across the nation to assess where legal risk and liability should lie for unexpected and dramatic losses during this period.
Few organizations will be immune to the possibility of litigation, especially as motivated plaintiffs’ attorneys target some of the hardest hit companies and industries. Customers are suing ticket sellers, airlines, theme parks and fitness centers for refunds. Students are demanding tuition back from universities. Cruise lines are accused of negligence and failure to warn passengers about coronavirus risks. Hospitals, nursing homes and detentions centers are all under scrutiny for allegedly deficient levels of care. Employees are suing employers claiming inadequate health and safety policies.
And there are also a growing number of lawsuits between businesses. Owners are suing insurers for denying business interruption claims and banks for their administration of the Paycheck Protection Program. Business partners are litigating over non-performance of contract terms and lawsuits have been filed against parties pulling out of transaction agreements. The list goes on.
While some courts remain closed and others are only slowly opening back up, litigation headlines about new court filings continue to splash across national, regional and trade publications daily, spotlighting the wide range of COVID-19 related controversies. As more lawsuits are filed, coverage will only increase because the media has an interested audience with a personal stake in the legal fallout of the pandemic. Broad swaths of the population want to understand how courts may distribute some of the heavy social and economic burdens caused by the health crisis. We all want to know who will be held legally responsible, across issues, and what that means for each of us.
In this fraught environment, strategic communications are more critical than ever to reducing an organization’s risk of liability and reputational damage. Below are some recommendations for effective communications during this time.
Be open and thoughtful. There is an increased pressure for and expectation of clear, thoughtful and timely communications that demonstrate careful and balanced thinking when announcing major decisions that materially affect stakeholders. An open communications approach that discloses details about what is happening, why it’s happening, what comes next and when people can expect to hear more helps minimize the contempt and confusion that often provoke lawsuits. An organization should also feel comfortable showing appropriate empathy and admitting it doesn’t have all the answers yet – we are all figuring this out together.
Prepare for news media attention. COVID-19 related lawsuits are receiving far greater press attention than the average lawsuit – and organizations involved in a legal battle should have a plan for handling the media. Plaintiffs may choose to leverage media coverage to drive a settlement or encourage regulatory or governmental investigations. Defendants may consider a subtler form of media engagement to minimize the risk of sensational, one-sided stories. All organizations should reinforce their corporate media policies with employees to ensure their workforce knows how to handle inbound reporter inquiries.
…and social media. As people remain in lock down, social media is an increasingly popular tool for commenting on the news and fomenting discontent. Depending on the nature of the lawsuit, social media can be leveraged to support a litigation strategy, or it can be a high-risk platform for widespread criticism. Companies should monitor social media for negative chatter about their organization before, during and after any lawsuit they confront. They also should develop a plan that identifies thresholds for when and how to address online commentary on different forums, including industry-specific message boards and employee-focused platforms like GlassDoor. Finally, companies should reinforce (or establish) corporate social media policies with employees.
Respect regulators and legislators. These key audiences are paying attention and can serve as an ally or an opponent. They can exacerbate a situation by instituting follow-on investigations or publicly criticizing your organization’s actions or inactions to underscore a political stance. Or they may help by enacting legislation or regulation that protects your company and your industry from liability. Communications with regulators and legislators ahead of and during a litigation, as appropriate, are an important consideration for any communications plan right now.
Develop a tailored and creative communications strategy. While COVID-19 underlies all these lawsuits, no one communications plans fits all. Depending on your litigation goals and the nature of your business, your communications strategy can take many different forms: an aggressive approach of interviews, press releases or press conferences; a subtler or more defensive approach of media background meetings and leveraging legal filings to tell your story; a stakeholder-focused approach consisting of direct outreach to targeted audiences; and so on. Whatever your organization’s preference, it’s important to have an agreed-upon plan in place that supports your litigation and business goals before the press starts calling.
Experts predict that the upsurge in lawsuits has only started and the list of parties susceptible to litigation will continue to broaden. Investing resources now towards thoughtful and strategic communications planning to navigate this unprecedented period may help your organization avoid substantial long-term losses and mitigate against reputational damage.
Nazan Riahei is a Senior Vice President at Abernathy MacGregor, where she advises clients on critical communications situations, complex litigations and corporate crises. Nazan is a former practicing attorney with an expertise in the intersection of media and litigation. She is a graduate of New York University School of Law.