BulletProofBlog the blog on crisis communications

President Obama last week announced his intention to end Bush Administration rules that were written to protect companies from product liability litigation in state courts. While consumer advocates and trial lawyers cheered this move against federal preemption, business leaders widely see it as a full-employment act for the plaintiffs' bar that will likely result in a significant uptick in lawsuits and the reputational liabilities that go along with them.

What many businesses find most troubling about the president' s two-page memo is that it failed to cite specific industries that new rules should target - meaning that the manufacturers of everything from food to toys to complex financial products may soon be dealing with the perils of a far more treacherous legal landscape. Furthermore, state regulators and attorneys general that see weakened federal regulation as a key driver of the current economic crisis could also leverage this impending policy shift into more high-profile investigations and enforcement actions that will burnish waning watchdog credentials.

For those businesses that haven' t already adjusted to the realities of the Era of Accountability, this is a warning shot across the bow. Public anti-corporate sentiment that had been building long before the financial markets crashed is now giving a green light to lawmakers, regulators, and trial lawyers with a penchant for reform - and for punishing perceived wrongdoers.

As such, companies that are most vulnerable to such attacks need to be seen as leaders in consumer protection. If they aren' t, their valued customers could soon become harsh critics or, worse yet, plaintiffs.

Gene Grabowski is Senior Vice President of Crisis and Litigation at Levick Strategic Communications and a contributing author to Bulletproof Blog.