Comment or no comment? Why lawyers are wary in a crisis

Having worked both sides of the fence, Corporate Affairs Account Manager and lawyer Carina Tan-Van Baren explains how to navigate often contradictory advice when it comes to speaking to the media.

Your company is in crisis.

You are investigating what went wrong and trying to fix it – assuming it can be fixed.

In the meantime, your offices are besieged by worried clients and investors, regulators are demanding answers and the media smells blood.

How do you respond?

Ideally, the company will have a crisis response strategy in place that steps out a carefully considered plan of action, including what to say publicly and when.

If not, many CEOs are inclined to batten down the hatches while they deal with the operational side of the crisis and put off thinking about public comment, along with any uncomfortable questions they would rather not answer, like “Who’s to blame?”

However, in a crisis, timing is critical and the decision about a public response needs to be made quickly.

At its simplest, the immediate choice is between making some form of public comment and issuing a terse “No comment.”.

A company’s lawyers and public relations advisors will frequently present forceful and opposing arguments about which way to go – particularly if these advisers have not previously worked together in a crisis.

But contradictory advice doesn’t do the CEO any favours.

In a high pressure situation, they may feel compelled to take the advice of one and disregard the other, putting the company’s legal or commercial position at risk.

Or the time taken to work through the opposing advice may cause a damaging delay in the company’s response to the crisis.

What the lawyer means

The natural instinct of a lawyer is to err on the side of extreme caution to minimise risk and limit their client’s legal exposure. While their advice will depend on the specific circumstances of a crisis, broadly speaking, this is likely to translate to:

avoiding public statements or interviews by company officers that may include damning off-the-cuff comments; and
not releasing any material which may inadvertently support a legal claim or charge against the company (except as part of strictly controlled legal processes).

In short, it’s likely to be a “No comment” approach – at least while the company gets its house in order.

As a lawyer, I understand the instinct not to rush into a response.

From a legal perspective, the preferred approach would be to take time to gather information and look at the matter in detail and from every possible legal angle before preparing a considered statement that in no way admits any liability or fault on the part of the company.

But protecting the company’s legal position is only part of the challenge in responding to a crisis.

Avoiding prosecution or litigation would be a hollow victory if the company’s brand is so damaged by a crisis that it loses critical market share or is no longer commercially viable.

What the PR company means

If a company operates in a visible industry, it must not only act quickly and responsibly in a crisis, it must be seen to do so. It must be accountable for its actions. That means fast and effective communication.

If consumers, clients and other stakeholders don’t know what’s going on, they will assume the worst.

A “no comment” should be avoided wherever possible. It may be perceived as an admission of guilt or, at the very least, of a position so indefensible that the company won’t even try to put a positive spin on it.

Even a brief holding statement that the company is investigating the matter before making further comment gives an impression of responsible action rather than a reflexive cover-up.

In extreme circumstances, there may be no positive angle for the company’s position. Then, rather than “no comment”, it becomes a matter of communicating present accountability and responsibility and trying to limit damage to the company’s brand.

Timely and effective communication by a company may also influence a regulator’s determination of what, if any, penalties should be imposed in light of the company’s attitude to the crisis and the extent to which the company can be trusted to operate responsibly in the future.

However, a good PR advisor will be aware that some communications may weaken the company’s legal position and that this may not always be obvious without legal advice or training.

How do we bring them together?

Legal and PR advice most often clashes in companies that have not previously faced crises or where the advisors do not understand or respect each other’s roles.

Experienced lawyers and PR advisors will understand each other’s priorities and work cooperatively on an approach to maximise their client’s legal position while addressing the commercial need for timely and effective communication with consumers, regulators and other stakeholders.

Companies wanting to put themselves in the strongest possible position should identify advisors with the appropriate experience to consider these issues in the context of a crisis response strategy well before a crisis erupts.

Carina Tan-Van Baren is a health and aged care specialist at Purple, with more than 25 years’ experience in issues and reputation management, stakeholder engagement, the property sector and strategy development. She has also worked as a commercial solicitor, specialising in property law. Contact Carina.