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Author: rosslaguzza | Total views: 1 Comments: 0
Word Count: 1457 Date: Thu, 18 Jan 2007 9:14 AM

Corporate Image Is Everything... Or Is It?

Even before the perilous days of post-Enron corporate bashing, defense lawyers and their clients spent considerable amounts of time developing strategies for softening a company's image, personalizing a company, and/or acquainting jurors with the benevolent motivations of a corporation and its people. I will never forget one client that made it a condition of retention that the trial lawyers mention early and often the company's annual gift of American flags to the Boy Scouts. The basic assumption underlying these efforts is quite simple: If the jury can be persuaded to humanize the corporation, it will be more receptive to its themes, evidence and witnesses, and hopefully less punitive.

Sometimes clients engage in a fair amount of debate about who should represent the company at trial. There often is a great deal of emphasis placed on getting a person with the right "look," the right position, and of course the patience and commitment needed to sit through a lengthy trial. Again, the idea is that a positive image will increase the chances of a favorable verdict. Reality, especially when it comes in the form of juror decision-making, can be quite complex, but often more predictable when understood. Indeed, real jurors find against companies they think highly of all the time while companies with less than desirable images prevail. How can this be?

The Risk of Being a Good Guy

As it turns out, the effect of corporate image--whether it be positive, negative, or neutral, on juror decision-making--is influenced by other key factors which must be assessed to truly understand case risk. A company with a positive image may be at higher risk than a company with a neutral image and, in some cases, than one with a negative image. A company's image does not operate in isolation of other key factors. Indeed, in some cases, it doesn't even figure into jurors' decision to punish.

Years of empirical research on jury decision-making shows the path jurors are likely to travel when deciding to punish a corporation. We'll explore those pathways, with reference to the following terms:

- *Allegation* refers to the claims made against a corporation in a given case. This is a critical filter through which jurors evaluate everything else.
- *Image* refers to the image a company has going into trial and can be located along a continuum from negative to positive. (This factor, along with the others can change over the course of a trial.)
- *Responsibility* relates to jurors' typical interest in whether or not the company has acted irresponsibly in terms of policies, procedures, conduct, supervision, enforcement, testing, and the like.
- *Safety* refers to jurors' concerns about whether the company is committed to safety in everything that it does. This construct includes physical and emotional safety and applies to all cases.
- *Knowledge and Control* refers to the algorithm jurors use in all cases to make attributions of fault. The more knowledge of and control over the circumstances that produced the allegation a company has (relative to the plaintiff), the more blame will be assigned to the company.
- *Desire to punish* is selected as the key outcome variable since it is typically at the center of any risk assessment.

The Path to Hell is Paved with Good Corporate Image

The specific allegation, (e.g., sexual harassment, toxic tort, breach of contract, personal injury) activates a set of juror expectations and beliefs which will influence how the corporation and case facts are perceived by the jury. From that point, jurors can travel initially in one of three directions.

- Pathway 1 (allegation/image/knowledge and control/desire to punish): Some jurors will consider the company's image and see if it fits the allegation. In the case of a company with a positive image, the model suggests that jurors will still look at the facts to determine whether the company had more knowledge and control than the plaintiff over the factors that produced the dispute. If they determine that the company has much more knowledge and control, jurors still will be motivated to punish. The typical juror justification for punishing a company with a positive image is, "They know better than to treat people that way.

I am really surprised that they would act that way given that they have the power to do whatever they want and usually make the right choices. They need to be sent a message that they must live up to their high standards 100% of the time." Holding companies with positive reputations to unrealistically high standards is quite common and explained by this model. A simple way to think about this is when the celebrated sports hero is caught dealing drugs. It is seen as a fall from grace and people feel betrayed. So, in this situation, efforts to enhance the company's reputation actually make matters worse.

- Pathway 2 (allegation/responsibility/knowledge and control/desire to punish): Some jurors will move from the allegation to the question of whether or not the company acted responsibly. If they feel the company failed to meet their expectations--especially if the company is perceived to have significant amounts of knowledge and control--jurors will be motivated to punish. As can be seen, jurors following this pathway need not consider the company's image at all. In reality, this is quite common and many efforts at trial to "put a face on the company" are in vain.

- Pathway 3 (allegation/safety/knowledge and control/desire to punish): Some jurors will move from the allegations to the question of whether or not the company is committed to safety. Jurors try to determine a pattern of conduct consistent with a safety motive. Even in cases in which jurors believe the company acted unsafely in a specific instance, they still want to know if the conduct was an isolated incident or the product of an unsafe corporate culture. Again, the safety construct applies to all cases, even those which don't involve physical consequences. For example, a company that permits discrimination is unsafe in a broader sense, even if no one is physically harmed. Knowledge and control plays the same role as in the other pathways.

- Complex Pathways: Of course, during the course of a trial, jurors may evaluate other issues along other pathways, one of these being corporate image. The company at the highest risk for punitive damages is the one which jurors individually or collectively conclude acted irresponsibly and unsafely, even though it had adequate knowledge and control over the circumstances, but otherwise has a positive reputation. The inconsistency between what jurors expect and what they observe is a powerful motivator for punitive damages (e.g., "I always thought they were such a good company. This conduct is really beneath them").

On the other hand, a company with a negative image may escape punishment because jurors believe that, in the context of the specific allegations, it acted responsibly and safely. This is especially true when jurors believe that the plaintiff had enough knowledge and control over the circumstances and was not a victim (e.g., "I don't like this insurance company, but I do believe they had the plaintiff's best interest in mind, and besides, the plaintiff should have complained sooner if he felt he was being cheated").

It seems complicated; can't we just go back to "personalizing" the corporation?

Defending a company is complicated. Focusing on corporate image alone is risky. The other key factors represented in the model are vitally important in jurors' decision to punish (or find against the defendant). Ignoring any of the issue areas when evaluating and preparing a case is perilous. The model also suggests that the best way to motivate jurors to think favorably of a company is to show how the company is responsible and safe in the context of the allegations made against it and not merely in general terms (i.e., is a charitable company that is a good citizen in the community).

In fact, jurors report resenting attempts to build the image of a company at trial by focusing on irrelevant deeds. The flag-giving company mentioned earlier was routinely trounced by juries who reported resenting the mere mention of the company's pro-scouting contributions. Knowledge and control is the critical junction for all pathways. Most effective trial strategy starts with an analysis how to increase juror perceptions of plaintiff's knowledge and control. The fallout from Enron has made the game harder to play, but it is the same game and can be won if you know the rules.