Tuesday, October 29, 2013
Have we entered an era of big fines and large settlements, or is it more of the same?. Penn State, JPMorgan Chase, Chevron, BP ... All face huge penalties. Are they just compensation and do they change behavior? There are arguments on every side of those questions. From the viewpoint of PR, they are large and continuing injuries to the reputations of the organizations involved. Their failings will live on in internet databases and they will or have already become case studies of neglect or managerial failure. The higher the damages, the more defensive litigation as Chevron and BP are engaged in. One can pay teams of lawyers for years and still not come close to surpassing the penalties being imposed. Should they win, they can point to the judgment as partial vindication. However, in the court of public opinion, they will have a long way to go. It is not just money paid out in fines and settlements but the funds spent in restoring reputation that amount to a huge bill. No wonder more corporations are fighting rather than settling.