BulletProofBlog the blog on crisis communications

In this regular feature, Bulletproof interviews top plaintiffs' attorneys for their perspective on the crises likely to affect businesses in the near future. Today we talk to Mark Tanner, name partner at the Philadelphia-based Feldman, Shepherd, Wohlgelernt, Tanner, Weinstock & Dodig, a premier regional plaintiffs' firm that consistently wins multi-million dollar judgments in consumer, automotive, insurance, qui tam, and diverse other areas.

What factors do you see affecting your practice in the coming months?

Mark Tanner: It doesn' t take a lot of imagination to see that the economy will continue to have a significant impact. On the one hand, there are new types of cases that can be attributed to the down market. On the other hand, how we handle cases is different and will be different as well in the coming months.

As an example of cases that arise directly from the down economy, we are very interested in real estate TICs, or "Tenancies in Common." TICs are business arrangements in which real estate investment groups approach individuals who, in typical cases, have just sold property and need to reinvest the proceeds to avoid capital gains taxes.

The investment group will say, "Look, instead of going out and buying another home that you may not want, invest with us and acquire an ownership interest in a new shopping mall." That' s all well and good…but, in typical pre-meltdown fashion, there was a lot of speculation going on.

Too many shares were sold at diluted value, with the expectation that share values would appreciate in line with the anticipated property appreciation. Instead, the market crashed, property values dropped, and the individual investors who were led to believe that this was a safe investment that offered tremendous advantages lost what amounted to their life' s savings.

These situations are not about legitimate risk. These are situations in which the investment group simply did not provide full disclosure. I believe the problem is widespread and that there may well be significant liability at multiple levels of the real estate and financial services industry.

You mention that the economic downturn also affects how you handle cases. In what way?

Mark Tanner: Our clients are typically victims of disastrous events and profound injuries that put them out of work for long periods of time if not for life. Even if the economy improves, the job market will continue to be a lot tougher going forward. The opportunities for some clients, who, despite the adversity presented by their injuries, want to return to work, will be very limited.

I' m now saying to juries, "My client has been open and honest in everything he' s said in this courtroom. What if he is equally honest and open in applying for a new job next year or the year after that? After being out of the workforce so long, the hill he' ll need to climb to resume gainful employment will be steeper."

The message is clear, and it supports larger awards that recognize the long-term impact of the loss of gainful employment. At the same time, health care benefits are being cut, further supporting larger awards for long-term care.  

We are also aware that, in this economy, more companies are under-insured or in precarious financial condition. As a result, it becomes increasingly important to identify any additional parties that might be at fault, and that can contribute to the compensation we believe our clients deserve. 

In that context, what industries might be particularly affected by these pressures toward higher judgments and multiple parties?

Mark Tanner: The construction industry is a prime example. In the face of intense economic pressure, there is a strong desire to cut costs. These cuts impact the existence and limits of insurance coverage but also, and more significantly, at times they involve reducing or eliminating safety practices, which some companies perceive as one of the few areas where they can make cuts and still get their buildings built. Failures to comply with OSHA guidelines, overlooking required fall protection, and other such shortcuts, risk workers' lives.

Such reductions directly equal liability. They relate directly as well to the greater scrutiny that must be given to be sure all responsible parties at a job site are included in any potential suit. We make every effort to include in our suits all parties bearing any degree of responsibility so that we can be sure our client is properly protected.