This is the time of year when all the “futurists” and prognosticators come out with their predictions about what will happen in the coming year. Things are changing so rapidly that it’s becoming more and more difficult to predict the future, but there are some emerging trends that will have an enormous impact on businesses and their litigation in 2020 and beyond.
1. The importance of reputation and brand
Annually, numerous publications including Forbes and the Financial Times, publish a list of the most valuable brands in the world. These lists are compiled based on the reputational value of these companies, which goes beyond just their revenues. And increasing brand valuation is a significant focus for every company on these lists, as well as those who aspire to one day make the list. But regardless of a company’s size, every business has a brand and reputational value that they are trying to protect and increase. And one of the quickest ways for it to be negatively impacted is through litigation. (It’s interesting to note that negative impact on a brand can often happen overnight, while positive increases in brand valuation usually take much longer periods of time.) Litigation that becomes public knowledge – regardless of its merits – initiates a ‘trial’ in the “court of public opinion” where incomplete and often inaccurate information is weighed and judgment rendered before the defendant has an opportunity to mount any type of ‘defense’. Social media has only served to accelerate these ‘judgments.’
Although it can be difficult for most businesses to avoid all litigation (even small companies get sued), it is possible to be proactive and prepare for predictable litigation by developing crisis plans that can be activated at the first sign of trouble. The companies that invest the upfront time and effort in preparing for the inevitable will be the ones who have the best chance of withstanding the initial impact of a reputational crisis. Businesses of all sizes, in all industries, need to recognize that their brand and reputation is their most valuable asset and that it must be protected with proactive and intentional forethought and planning.
2. The “Reptile” continues to attack
The “Reptile” attack has been a huge boon to the plaintiff’s bar with over $8 billion and counting in verdicts and settlements. There’s no denying it – the “Reptile” method has been widely successful. And what should keep defense counsel up at night is that, up until this point in time, the “Reptile” method has focused almost exclusively on cases involving personal safety and care (healthcare, transportation, medical malpractice, trucking, etc.), but there is a trend developing where the “Reptile” approach is being deployed in areas broader than personal injury and death: product liability, patent infringement, and even family law. With just a slight adjustment, the safety and danger rules that are core to the “Reptile” method can be applied to questions of reasonableness, rationality, sensibility and fairness. Once this shift becomes commonplace, the “Reptile” will be fully unleashed.
Just like in nature, the only proven defense to a “Reptile” attack is preparation. In The Art of War by Sun Tzu, he says “If you know the enemy and know yourself, you need not fear the result of a hundred battles. If you know yourself but not the enemy, for every victory gained you will also suffer a defeat. If you know neither the enemy nor yourself, you will succumb in every battle.” Defense attorneys must prepare themselves for potential “Reptile” attacks by researching their adversary and must prepare their clients to combat a “Reptile” attack when it’s unleashed. A comprehensive, neuro-cognitive witness effectiveness training with an experienced psychologist – prior to deposition - is the most effective way to prepare vulnerable witnesses for a “Reptile” attack. Without training focused on combatting the emotional, behavioral and cognitive triggers that a “Reptile” plaintiff attorney will employ, all witnesses – regardless of their level of fortitude or testimony experience – are susceptible to a “Reptile” attack, which will inevitably lead to a negative outcome.
3. Litigation increases driven by economic uncertainty and rapid technological development
There is healthy debate in the legal community about what the impacts are – and will be – on litigation in light of economic uncertainty. Although the economy remains fundamentally strong, observers cite a darkening of the clouds on the horizon that could turn stormy in 2020 or may simply dissipate into the atmosphere. Fact is, no one knows for sure, but what is known is that uncertainty about the future can drive behaviors for which businesses may not be prepared. In prior economic downturns, class action lawsuits increased. And the head-spinning rate of technological advances seem to be driving increases in IP litigation. The dichotomy of a healthy economy with the potential of some headwinds creates uncertainty and doubt that could manifest in increases in litigation.
4. Ignoring enterprise risk management will lead to increased litigation exposure
Board rooms and management teams in businesses around the world are familiar with the term enterprise risk management (ERM.) But in many cases, the definition of ERM varies from firm to firm and even within the board rooms and management teams inside each organization. Often ERM is simply seen as a function or department or just a listing of possible risks to the business that may be reviewed at monthly executive team meetings or quarterly board meetings. This simplistic view of ERM is both short-sighted and dangerous. The more accurate definition of ERM is that it is a framework for organizational discipline, approach and control inside an organization which allows the business to assess and improve its risk management capabilities in every aspect of its operation. ERM can and should be applied when considering strategic and operational decisions that can impact shareholders, customers and employees. When a business does not have a comprehensive ERM framework with oversight from its board of directors and consistent review and consideration from its leadership team, the business is not operating as an ERM-centric organization. And the lack of focus on ERM can expose the company to unexpected crises and litigation which may be difficult to recover from. Ingraining an ERM philosophy into the culture of the organization – with buy-in from all levels of the business – is critical to successful operation of any business in this fast-changing and litigious world.