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'It's before the courts'

By Ed Shiller

Ed's Blog

What's your first reaction to a corporate executive or other public figure who refuses to comment about allegations of wrongdoing because "the matter is before the courts"?

Be honest! Can you truthfully say that you'd accept the explanation and suspend your judgment until the judicial process had come to its inevitable (or not so inevitable) conclusion?

Hmmm! Not too many of you raised your hands. And no wonder. More likely than not, the reluctance to give a public accounting had less to do with (not always accurate) perceptions of proper judicial procedure and more to do with a desire to cover up malfeasance.

There is no doubt that certain topics are off limits to public utterance by participants in a lawsuit or by members of the public. Stating that a witness lied on the stand or that the judge is biased are definite no-nos and could be rewarded with a contempt citation.

It is equally true, however, things that may have been highly confidential prior to a legal action, may become public once an action is begun.

The reason? Unless a judge has ordered a publication ban, all materials filed with a court become public. Just march down to the courthouse and pay your $3 (or whatever the designated fee) and pick up your copy of what, until then, would have been top secret.

Several years ago (that is to say, in the previous millennium) a mining company filed for an injunction to prevent its customers from collecting $48 million they were awarded by a British Columbia arbitration panel. The panel ruled that the company had overcharged its customers by that amount.

In backing up its request for an injunction, the company said that it didn't have $48 million, and forcing it to pay that amount would simply drive the company into bankruptcy.

In opposing the injunction, the customers, who were also part owners of the company and hence privy to all kinds of confidential information, claimed that the mining operation could, indeed, support a $48 million charge. And to prove the point, the customers filed with the court a detailed breakdown of the company's unit cost of production.

Just like that, one of the company's most highly guarded secrets fell into the public domain.

If, a day before the filing, a reporter called the company and asked for a breakdown of the unit cost of production, the proper answer would have been: "Sorry, that information is confidential for competitive reasons." But, from the moment of filing, your answer to that question would be: "Sure, here it is…."

Likewise, if you're taken to court with accusations of, say, gross negligence, misappropriation of funds or racial discrimination, you would certainly build more public support by denying the charges than by uttering a sheepish "I can't discuss the matter while it's before the courts."

Indeed, once you file your defence (assuming you weren't guilty and didn't so plead), those denials are a matter of public record and may be repeated by you or anyone else.

Remaining mute to reporters' questions will not only engender a perception of guilt among the general public, it may also alienate the media, which may then become sympathetic to your accusers.

 


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