LETTER FROM AMERICA: No decision is too minor to have a reputational effect

Companies are advised to involve PR professionals in all decisions with major PR and reputational implications to avoid hefty court pay outs, says US commentator Paul Holmes

The recent news that a jury in California awarded £186m to the family of three people killed after a Ford Bronco 4x4 rolled over is bound to re-awaken tort reform advocates, who love to use exceptional cases such as this to support their arguments about 'runaway jury awards' and huge windfalls for victims and their lawyers.

And this case gives reformers plenty of fodder. For one thing, the sum represents the largest punitive award ever affirmed by an American court in a personal injury case. For another, the jury appears to have applied some idiosyncratic ideas: one recounted a recurring dream in which her children were killed in a similar accident and Ford lawyers stood by asking 'Where's the proof?' Another gave an inaccurate account of a TV programme on Ford that jurors had been told not to watch.

Awards such as this one create a perception problem, partly resulting from a failure to understand the difference between compensatory damages and punitive damages. The £186m sum in this case cannot be considered punitive to a company the size of Ford - nine days profits, according to the appeals court.

But it's an outrageous sum to fall into the hands of the family and its lawyers. Perhaps the system needs to be changed so that punitive awards go into community trusts, most logically to finance consumer safety watchdogs that could prevent future incidents. From a PR perspective, however, the case raised other interesting issues.

One reason the award was so high was the fact that Ford marketed the Bronco as 'tough' and 'rugged' despite it featuring what the plaintiffs argued was 'the weakest roof in Ford's history'. Another was the discovery of a Ford document implying a hollow hump that suggested the appearance of a non-existent rollover bar was 'a rollover bar appearance theme'.

Where were the PROs when those design decisions were discussed? My guess is they were on another floor, discussing the colour of the next Bronco press kit. At Ford, as at most American companies, decisions with profound PR implications were most likely made without input from those in the communications department.

I've long argued that every decision an organisation makes has reputational implications as well as the operational, financial, and legal implications. This case provides yet more evidence that factoring in those reputational implications will lead to more efficient - and less expensive - decision-making.

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