WHAT TO DO WHEN THE PHONE RINGS A POST-CRISIS CHECKLIST FOR THE INTERNATIONAL LITIGATOR
| Jurisdiction | United States |
(Apr 1999)
WHAT TO DO WHEN THE PHONE RINGS A POST-CRISIS CHECKLIST FOR THE INTERNATIONAL LITIGATOR
Exxon Corporation
Irving, Texas, USA
Crises come in all shapes and sizes. A crisis, even the same crisis, may be a "bet the company" catastrophe to one company, yet no more than a minor annoyance to another. No one would doubt that the Exxon Valdez was a crisis, but what about the more recent and much larger Braer and Sea Empress spills? The Piper Alpha explosion was undoubtedly a crisis, but what of the loss of the Sleipner GBS where huge sums of money and the reputations of many were at stake, but there was no loss of life and little media attention outside of Norway?
Whether there was loss of life, the number of people directly or indirectly affected, the environmental impact, the extent of government involvement and the amount of media coverage, locally or internationally, will all affect how the event is perceived within and without the company. This will, in turn, affect how the loss is handled and therefore the role of the company's Law Department and its outside counsel, particularly at the outset. The level of severity of a crisis is often defined by a company's emergency response or crisis management manual. The severity level triggers the appropriate response, the assistance of the appropriate departments2 and the involvement of the appropriate level of management, from a local manager to the parent CEO. Attempts to define a crisis are less necessary, or even helpful, to the international litigator to whom this paper is addressed. After the smoke clears, the damage is mitigated and, hopefully, the bright light of media attention subsides, regardless of what it was called originally, the litigators are left with a case that must be handled much like any other.
There are at least three stages to the management of any crisis: (1) the immediate emergency response; (2) the investigation stage, both internal and external; and (3) the litigation stage. There is also the process of permanently repairing the damage or replacing the facility, this generally runs concurrently with the litigation stage. The lawyer, of course, plays a key role in all three stages.
At the first hint of disaster it is important to have a senior lawyer on site to aid in the implementation of the emergency response plan, to make an effort to preserve evidence and identify witnesses. A lawyer should also review statements to the press to attempt to avoid inadvertent admissions (of course, other advisers may well be suggesting that there should be an admission of responsibility by the company in order to assist with public or government relations concerns.)
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The lawyer has a key role in the investigative stage, whether it be to monitor and attempt to influence a government investigation or as a member of an internal investigation team. In some cases a lawyer may even lead the internal team in an effort to (a) prepare for litigation and (b) fully develop the facts with the assistance of the confidentiality provided by the attorney-client privilege. Lawyers have met with only partial success, however, in keeping internal investigations confidential as to private litigants; government investigations may not accept the attorney-client privilege at all.3 Companies would be wise to not count on the confidentiality of any internal investigation; there are too many legal and illegal ways for a report to end up in the hands of an opposing party or the media.4
The following checklist will hopefully be of some assistance to both in-house and outside attorneys involved in any aspect of a crisis. It is primarily directed to lawyers responsible for managing the various investigations and types of litigation that are certain to arise from a catastrophe, including claims by the injured, claims against or by insurers, and indemnity claims by or against other companies.
1. Understand your client's priorities
A lawyer's first duty, whether an in-house lawyer who gets the first call or an outside counsel called days or weeks later, is to understand the client's priorities and the lawyer's role as a member of a crisis management team. The lawyer has a...
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