The proliferation of social media has brought with it increased dangers of reputational damage to eating and drinking-out brands. Here, Addleshaw Goddard’s Abigail Healey looks at what businesses can do to prepare for a potential media crisis and how to manage their reputation in such a situation
Operational issues, health and safety breaches, data hacks/breaches, adverse social media coverage, aggrieved customers and disaffected employees are just some of the issues that can put at risk the reputation of a hospitality business, its brands and its directors. Recent examples such as Byron (immigration raids) and Wahaca (norovirus outbreak) have given practical examples of the damage this can cause.
While it is not possible to anticipate every potential threat to reputation, it is feasible to plan and prepare for some scenarios, so that if/when the proverbial does happen, the business mobilises most effectively.
First, ensure the business has a crisis plan – and team – in place. The plan should reflect the culture and priorities of the business. For instance, if aggrieved customers take to social media, do you respond and if so, how? In many cases, it is not so much the initial adverse comment but the business’s response that often causes the most damage (and can attract media attention), so care needs to be taken by someone with sufficient seniority when handling potentially sensitive issues.
In terms of the team, that will depend upon the set-up of the business but is likely to require input from legal and communications (with other potentially relevant functions including HR and IT), and be headed by someone at board level. The more joined up a business can be internally, and the more effective it is at internal communications, the more likely it will be able to prepare and protect itself. If the business is going to be in the public eye more than usual then the threat from external sources wishing to do the business harm may be greater. Eg, many businesses have reported an increase in the attempts to hack their systems following high-profile marketing campaigns.
If the business would need to involve external advisers in a crisis, then ensure that those advisers are on board before the event and everyone – internal and external – understands their roles.
Finally, businesses would be well advised to ensure that the plan and team are tested. No doubt all businesses have regular fire drills, so why wouldn’t a business hold regular crisis simulation exercises, to ensure that the plan is fit for purpose and the team works effectively together?
There are, of course, many other aspects of protecting reputation to consider. If the business already has a good reputation, it is more likely to be able to recover from a crisis. There are many aspects that it is not possible to explore in this article, including key stakeholder engagement (including employees and customers), ensuring a good track record in governance and compliance, and cultivating the media, generally.
When a crisis hits, it is imperative that the legal and communications functions of a business work together to achieve the same goals and objectives, though the remainder of this article focuses on some of the legal leverage that a business may have available.
Dealing with the media
If the issue has been picked up by the media, it is likely that the business will be approached for comment prior to publication or broadcast. Understanding the legal position, and any leverage in the relevant industry codes (ie, IPSO, Ofcom, BBC editorial guidelines) should form part of the decision making as to if and how to respond. For instance, it may not be possible to prevent damaging statements being published, but one might consider putting the journalist and editor on notice of false and inaccurate content, making the story more high risk and possibly so high risk that it isn’t published. Should the story relate to confidential and/or private information, then the business may well be on solid grounds to insist upon the media not running the story, and if necessary, obtaining an injunction to prevent publication altogether (unless there is a strong public interest justification).
When deciding on if and how to respond to that initial enquiry, care obviously needs to be taken not to confirm or feed a story that the journalist might not otherwise be in a position to publish, which is just one of the areas in which crisis communications advice is key to consider as well as the strict legal position.
Following publication/broadcast of a damaging story, the business is likely to want to consider its legal rights and remedies. While it might not have been possible to prevent publication, if the story is defamatory, or disclosed confidential and/or private information, then the business may well have a substantial claim in damages.
The business would be well advised to obtain specialist advice before proceeding, though, for a host of reasons, not least the fact that court proceedings are highly likely to continue to feed the story and, even if ultimately successful, it is possible to win at trial but still lose in the battle of reputations – one only has to think of McDonald’s’ libel claim (the ‘McLibel case’) of the 1990s to effectively illustrate the point.
That, of course, is not to say that a business should do nothing. Rather, litigation should always be thought of as a last resort and correspondence, negotiation, and/or a complaint to the relevant regulator, etc, may ultimately achieve the same outcome but with a lot less risk (and fewer legal costs). For instance, it is perfectly feasible to negotiate a retraction, apology, etc, which, coupled with a positive PR campaign around the same, may ultimately achieve the business’s objectives much more quickly and effectively than litigation.
One area that can often cause friction between legal and communications is around the issuing of a statement that may include an apology, and the extent to which that is effectively admitting liability (one such example being Thomas Cook’s refusal to apologise for the death of two children in a hotel in Corfu, later citing that it was their lawyers who advised them not to). Again, specialist legal advisers will provide sensible input on this, because it is perfectly possible to apologise without admitting liability, and from a reputational perspective, there may well be very strong arguments in favour of doing so, and doing so immediately (sometimes irrespective of the question of liability). Compare, for example, Thomas Cook’s stance with that of Merlin Entertainments’ response to the tragic Smiler rollercoaster crash, in which its CEO was quick to front the response and issue an apology (while stressing Merlin’s commitment to safety).
In any (potential) media crisis, time is always of the essence and there are many different players involved, be it those on the ground for the detailed explanation of what has occurred, the communications specialists with extensive media relations experience, and the lawyers to advise on rights and remedies. If everyone works effectively together as a team, the reputation of the business, its brand and directors,is far more likely to survive and – hopefully – thrive.
■ Abigail Healey is a partner in the reputation and information protection team at law firm Addleshaw Goddard
