Say You’re Sorry

In some lawsuits, falling on your sword may be smarter than wielding it.

In the end, companies are left with a difficult choice. They must ask themselves, says Shuman, “Do we spend a few million dollars fighting this, or do we acknowledge and address the harm we’ve caused” on the assumption that the savings in terms of settlement costs or public relations down the road will dwarf the expenditure? At the moment, at least, few if any companies besides Ford and Firestone are willing to make such an assumption, or to admit to doing so.

Kris Frieswick is a staff writer at CFO.

BENDING OVER BACKWARD

If you decide an apology is worth making, attorneys warn against hedging; for example, expressing regret but failing to accept responsibility for the results. A case in point is the first apology offered by U.S. Navy Comdr. Scott Waddle, the man in charge of the submarine USS Greeneville when it rammed the Japanese fishing vessel Ehime Maru off the coast of Hawaii. Last February, Waddle offered the families of the nine people who died in the accident “regret,” but he took no responsibility for the accident. That fell far short of what the victims’ families wanted. So a few weeks later, Waddle ignored the direct advice of his attorney and took full responsibility, saying it was a burden he would carry to his grave. Whether that will lead the families to settle rather than sue isn’t yet clear, but the fact that they expressed compassion for Waddle following his second apology is an encouraging sign.

Lawyers go so far as to suggest that halfhearted apologies can actually backfire. “Apologies make people angrier if they aren’t truly sincere,” says Joan Roover, executive director of the Center for Health Care Negotiation, in Lexington, Massachusetts. “They don’t accept it. Physicians get very frustrated by this. They think just saying ‘I’m sorry’ is a huge concession.”

An apology that comes from someone who was not involved in the dispute can also work against you. “An apology by the wrong person is no apology at all,” says Kenneth R. Feinberg, founder of The Feinberg Group LLP, a Washington, D.C.-based law firm that specializes in mediation, who likens it to “sending in your hired gun, who is still arguing that you did nothing wrong even while saying he’s sorry.” –K.F.

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