Navigating legal issues through communications

July 31, 2012

On June 27, 2012, I participated in a panel discussion on how legal and communications professionals can work together to help organizations navigate through the “choppy waters” of certain crises, unexpected litigation proceedings, and unexpected corporate transactions. The panel also included my colleague Brian Pukier, as well as Peter Block and Julia Johnston of National Public Relations. Our topics of discussion included the characteristics of a crisis, legal disclosure requirements, specific litigation concerns, and best practice suggestions for how to quickly and effectively manage communications in a broad range of types of “crises”.

As explained by Peter and Julia, a crisis faced by an organization can result from a specific identifiable event, such as a natural disaster. However, a crisis can also be framed by the perceptions of key stakeholders, as fostered by publicity, rather than actual events. This is especially true in our age of global and instantaneous media. Regardless of the source of the crisis, Julia stressed that a failure to respond quickly and properly risks harming an organization’s brand, reducing sales, inviting legal challenges and reducing its stock price, thereby increasing the company’s vulnerability to a takeover.

Depending on the situation, communications may also be subject to legal considerations. For example, Brian explained how both securities regulators and stock exchanges have rules mandating disclosure in certain circumstances surrounding the operation of a business.  Brian noted that it is important to be aware of these rules when making public statements (or refraining from making public statements as the case may be) because the violation of these rules or untruthful communication could lead to a crisis. However, these rules tend to focus on the interests of security holders. It is important to remember that shareholders are not the only audience of your communications. The perceptions of, for example, company employees, customers, suppliers, the government and the community at large should also be considered when communicating about business operations or in times of crisis.

Although refusing to comment in times of crises may be a way to avoid incriminating an organization in current or future litigation proceedings, public perception equates “no comment” to guilt or deception. Therefore, within the constraints of privileged information and client consent (in the event of lawyer communication to the press), it is important for an organization to consider its reputation when making communication strategy decisions.  As such, it is important for legal professionals to work with communications experts to ensure that legal considerations are being appropriately dealt with without harming public perception of the organization, and vice versa. 

Ultimately, each situation requires an individual assessment as to the appropriate response.  With this in mind, we outlined a few best practices for application to most crises:

  1. Be Ready: An organization should prepare for a crisis in advance. Once crisis hits time is sensitive and emotions are high, leaving little to no time to develop an appropriate communications strategy and learn how to properly implement it. Things your organization can do prepare include:

    1. Audit Vulnerabilities: Know what your organization’s vulnerabilities and weaknesses are.
    2. Prepare a Plan - Keep it Updated: Based on your organization’s vulnerabilities, areas of predictable risk can be identified. Have a crisis plan developed in advance and look at it regularly – things that are risks today may not be risks tomorrow, and things that are not risks today may be risks tomorrow.
    3. Empower a Crisis Team: Have a crisis team set up and ready to act on a moment’s notice. The team should consist of clearly defined people and responsibilities. The team should have the authority to act without first seeking several levels of approval.
    4. Designate a Spokesperson: This person should be media trained.
    5. Consider establishing a Dark Site: Many companies set up several dark sites that are customized to different risks and can be activated immediately. These sites store prepackaged materials, such as news releases, photos, statements and background information, which can be easily updated and uploaded.
  2. Communicate from the Outset: If you don’t communicate people will still talk about you. The only chance to have your voice heard is to speak out.
  3. Take Responsibility and Show Compassion: Work with counsel on this so as not to make your organization vulnerable to litigation. What may be helpful to note is that the Apology Act, which came into force in 2009, in Ontario (and similar legislation in the other provinces) states that if a person or company apologises for an occurrence, the apology generally cannot be used as evidence of fault or liability against him/her/it.
  4. Centralize the Information Flow: It is essential that the company have a single conduit from the company – one media trained, capable spokesperson.
  5. Third Parties: Maintain good media and government relations. Third party statements on your behalf in times of crisis can help calm a situation and increase your organization’s credibility.
  6. Correct Misinformation: Do not let incorrect information go unchallenged. Even if it is not publically corrected, you do not want false information repeated.
  7. Solve the Crisis: Whenever possible, you want to consider the future of your organization. However, sometimes you do not have that luxury. Your first priority should be to resolve the crisis at hand.

DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at www.stikeman.com/legal-notice.

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