Litigation Crisis Management
Published date | 11 June 2020 |
Author | Dr. Urs Feller |
Subject Matter | Corporate/Commercial Law, Litigation, Mediation & Arbitration, Corporate and Company Law, Trials & Appeals & Compensation, Shareholders |
Law Firm | Prager Dreifuss |
The session was chaired by Sverker Bonde (Advokatfirman Delphi, Stockholm) who had invited a distinguished group of panellists to provide insights and strategies for a company in a corporate crisis. Speakers were Ms Song-Yi Son, senior counsel for ABB Korea in Seoul, and Giovanni Lombardi of illimity Bank in Milan as well as the private practitioners Peter Calamari (Quinn Emanuel Urquhart & Sullivan, New York) and Urs HoffmannNowotny (Schellenberg Wittmer, Zurich).
The panel addressed how to balance the necessity of transparent and quick communication to the public against the different perspective required when defending the company against civil claims or dealing with regulatory or criminal inquiries.
Hypothetical scenario
The following hypothetical scenario was put to the panellists. Your client, a listed company in the IT sector, is subject to a massive data hacking attack involving the theft of private data of millions of customers. The hackers threaten to sell the data to the highest bidder unless the company pays a substantial sum to the hackers in bitcoins. News reports are being aired on an hourly basis, making the situation for the client increasingly difficult. How can general and external counsel prepare in advance for the possibility of such a challenging scenario?
Preparation and priorities
Song-Yi Son explained that preparation was key in such a situation. If the company only sets up a crisis organisation when things are at such a stage and are threatening to get out of hand, it's too late. The company needs to know in advance who is in charge in a corporate crisis, where the survival of the company is the top priority.
According to Song-Yi Son, a company needs to set the narrative, and respond to the most relevant question, namely how to communicate the crisis to shareholders, employees, the regulatory authority and to the wider public. The company urgently needs to mitigate the negative impact to survive.
Peter Calamari suggested that the company identified a single point of control where all information was available and the vital decisions are taken. The company needed a consistent approach in order to re-establish confidence in the market and with the public.
Giovanni Lombardi, having experienced the Parmalat demise, explained that a crisis committee with a clear chain of command was required to avoid the onset of a crisis in the first place.
Independent external investigation required
The hypothetical scenario was then further...
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