Winning the Battle but Losing the War; The Unseen Reputational Risk of Defending US-Style Class Actions

Winning the Battle but Losing the War; The Unseen Reputational Risk of Defending US-Style Class Actions

Winning the Battle but Losing the War; The Unseen Reputational Risk of Defending US-Style Class Actions 2310 1534 Liam McCafferty
A landmark case which could reshape the civil claims market in the UK is awaiting judgment in the Supreme Court. The case may lead to an increase in ‘opt-out’ style litigation, which presents reputational risks, write Liam McCafferty and Dina Hudson of Byfield.


Lloyd (Respondent) v Google LLC (Appellant) concerns how Google may have illegally tracked data from millions of iPhone users – including sensitive data such as health, race, ethnicity, sexuality and finance. If the respondent, Richard Lloyd – the former director of Which? – is successful, the judgment will have far reaching implications upon the availability of damages, data control requirements, and crucially, could open the flood gates to ‘opt-out’ style group litigations.

‘Opt-out’ litigations, commonly known as class actions, are commonplace in the United States, but have not gained traction in the UK as of yet, where group actions are taken on an ‘opt-in’ basis – requiring explicit consent from individual claimants.

However, that could all change if the Supreme Court rules in Lloyd’s favour. The rise of US-style group actions in the UK will present new challenges to defendant law firms looking to protect their client’s interests not just in the courts, but in terms of wider public perceptions. The media will always take an interest in high-profile, consumer cases – and without a strategy for managing reputational risk, it is possible to win the battle but lose the war.


“ Know thine enemy, know yourself”

The first step to any effective litigation PR strategy is to implicitly understand the terrain upon which the engagement will take place. In practical terms, that means the ability to size-up the respective strength of the opposing forces. In an obvious sense, this means a reasonable assessment on the strengths or merits of a particular case – not just in a legal sense, but on the respective reputations of the parties on each side of a dispute. Typically, this will involve a reputation audit of your client and their opponent. However, this plays somewhat different in a consumer-facing, class action – the party defending the claim might have strong, social credentials, but could its reputation quickly diminished in the face of an action where consumers, as a grouping of wider public, are perceived as the “wronged party.”

The second step is to acknowledge and be able to work within the broad societal and political trends which drive public perceptions on a particular issue. Take the child obesity crisis, which became subject to significant debate in the 2000s. McDonalds and Kraft both faced – and defeated – successive lawsuits in the US. However, victory in the courts alone was wholly inadequate to stem the tide of public opinion towards their culpability, and it has taken years of proactive effort to rehabilitate their reputations – and arguably amongst parents, only partially even now. The overwhelming currents of public opinion are the conditions on which the battle must be fought; a critical consideration to make upon choosing your litigation PR strategy. To adopt an aggressive approach, for example in this case, by attempting to publicly undermine the evidence from health professionals, would have been disastrous. To avoid a pyrrhic victory, it would need to couple a defence in the courts with a strategy for reputational repair from the outset, irrespective of the outcome.


“By failing to prepare, you are preparing to fail”

In other scenarios, the narrative will still be very much contested – even if the odds appear unfavourable. Before reporting on the case, most national newspapers will rely on the Particulars of Claim being made publicly available prior to a court date which starts to build a narrative pre-trial. Therefore, to ensure it is possible to control the narrative, it is crucial that a litigation PR strategy is crafted to support the legal case, through plotting key dates and inviting journalists to significant events such as the opening pleadings, as well as proactively distilling facts and carefully selecting key spokespeople.


“Ten soldiers wisely lead, will beat a hundred without a head”

This case should be watched closely by law firms, who are advising corporate clients and should be aware of the potential reputational impacts of facing such claims – in the court of law, and in the court of public opinion. The precedent the ruling has potential to set is significant in the realm of civil claims and for the status of litigation PR. If the court rules in favour, and ‘opt-out’ class-action style claims are set to pursue, there is increased reputational risk; and consequently, effective and considered communications that dovetail to the legal strategy, will be of paramount importance.