Any type of lawsuit is going to be bad for your company. Even if the lawsuit is completely unfounded, you’ll have to spend time, money, and other resources preparing a defense for yourself—and your brand reputation may be impacted, even if you’re found not guilty of whatever you’re accused of.
In the wake of such a lawsuit, your customers may lose trust in you, or may think of you more negatively. Fortunately, there are some steps you can take to recover.
Types of lawsuits you may face
These are the most common types of lawsuits that businesses face, and each has the potential to jeopardize your reputation:
- Personal injury. If you’re stuck with a personal injury case, either from an employee or a customer who was injured on your premises, it could quickly become high profile. This is especially true if the injury was due to neglect, or an action taken by one of your leaders.
- Copyright issues. Copyright issues can plague companies in certain industries. If you misuse a design element or piece of creative work from someone else, it could end up costing you.
- Discrimination and wage laws. Discrimination laws or other employment violations can seriously harm your reputation, especially if you’re operating a large corporation.
- Breach of contract. You may also be sued for a breach of contract. These cases vary in public perception severity; the general public might not care about a violation of your contract with a vendor, but could suffer major trust issues if you violate a contract with a paying customer.
Recovering your reputation
You can work to improve your reputation with these important steps:
- Acknowledge and explain your position. One of the first steps you should take is acknowledging the problem and explaining your position in a public setting. Unless otherwise instructed by your lawyer, list the facts of the case and explain your side of things. Feel free to omit details that are uncertain, but do try to tilt the public’s perception in your favor early on.
- Be honest, and admit fault when appropriate. Some lawsuits are going to come against you because you or your employees did something wrong. In these scenarios, if you don’t have a strong legal defense, it’s wise to admit fault and try to move past it. Customers will respect you more if you own up to your mistakes than if you try to ignore them, or pretend you’ve done nothing incorrect.
- Offer an apology when appropriate. In a similar vein, when appropriate, offer an apology for your actions—and make sure it’s an effective one. Explain why the situation occurred, explain what went wrong, and take accountability for whatever mistakes you made or oversights that you allowed. In some cases, you may offer compensation, freebies, or discounts to customers as an extended apology.
- Circulate facts and dispel misconceptions (politely). Lawsuits against companies are usually accompanied by circulating misinformation. It’s easy for rumors, lies, and inaccuracies to be blown out of proportion. Be proactive and try to dispel these facts when you encounter them. In addition, try to publish and popularize the facts of the case (as much as your legal situation will allow).
- Foster empathy. Customers won’t care about a faceless corporation being faced with a lawsuit. They’ll care much more about a personal face. Try to evoke as much empathy as possible by making a single individual in your company the “face” of the lawsuit, and make sure all your writing and PR efforts are written from a personal, relatable perspective.
- Be patient. In most cases, it’s going to take time to recover from the loss of trust you experience with a publicized lawsuit. It may take months, or even years of consistent effort to restore your brand reputation to normal. In that time, be consistent, and try to be patient during the process.
Prevent future issues
One of the most important steps is proactively preventing another incident from recurring. While it’s not possible to prevent every possible lawsuit, there are some simple measures you can take to dispel future incidents. Use the grounds and precipitating factors for the original lawsuit as an opportunity to think critically about your business; can you instill better safety precautions or better workplace practices so it doesn’t happen again? It may also be wise to consult with an attorney to reduce your risks further, or get a liability insurance policy to shield yourself from the monetary costs.
Dealing with a lawsuit can quickly turn into a PR disaster, but even the worst PR disasters may not have the power to completely undermine your business. Spend the time necessary to recover your brand’s image, and work proactively to prevent this disaster from happening again.