A Florida jury's July 14 award of $145 billion in punitive damages to sick smokers has pundits marking the dawn of a new age in "cause litigation," noting that battles once fought in state and federal
legislatures are now taking place in the courtroom. Gun manufacturers already are following the fated footsteps of Big Tobacco, and many predict that other much-maligned industries, such as HMOs, are on
deck to take their licks. And trial lawyers aren't corporations' only foes in the equation. Research has shown that once lawsuits are filed, the court of public opinion can have as much damage to a
company's reputation (and, ultimately, its pocketbook) as a court of law. A Hill & Knowlton/Caravan Research study, for example, finds that nearly half (48%) of Americans are less likely to buy a
company's product when the company is accused of wrongdoing in a lawsuit. Other key insights from the study:
- 62% of Americans believe that businesses will place profit ahead of the public's needs
- 62% believe that corporations that offer "no comment" in response to allegations are probably trying to cover up some wrongdoing (up from 58% in 1995)
- 55% think that government regulation will make businesses more responsive to public needs
- 51% think that boards of directors do not really represent the interests of their shareholders
- 40% believe that a company accused of wrongdoing in a lawsuit is probably guilty
(Hill & Knowlton, 212/885-0309)