BRAZIL Law and Practice Contributed by: Thaís Vasconcellos de Sá, Bermudes Advogados
For this reason, the co-ordination of the response efforts via a crisis committee that not only has representatives from the company’s legal department but that also relies on an external specialised law firm can be paramount for the success of the response to a crisis, mitigating legal risks on all fronts. 5.2 Dealing With Enforcement Authorities Responding to demands and engaging with enforcement authorities in Brazil (public pros- ecutors and public defenders) will be a chal- lenge, due to their overlapping competences and the autonomy of each member within their institutions. A robust, transparent and consist- ent response to the crisis will also ensure that the company’s reputation and relationship with these authorities are maintained throughout the crisis. The main legal exposures of a crisis will be: • criminal liability; • environmental liability (particularly when a cri- sis arises from a risk inherent to the compa- ny’s activities, as environmental law provides for strict liability for environmental damage due to the activities’ risks); and • civil liability. Engagement of external counsel with expertise in crisis response is critical when dealing with these demands, responding to immediate legal action most likely to be taken, and maintain- ing a proper relationship and reputation before enforcement authorities and the courts. 5.3 Co-Operating With Enforcement Authorities Balance Between Transparency and Consistency Maintaining a trustworthy relationship with pub- lic authorities is essential for a successful crisis
response. Companies are expected to main- tain a transparent and co-operative approach towards enforcement authorities, courts and regulators in Brazil. The key to achieving this is to be upfront regarding steps taken to address the crisis (interrupting ongoing impacts, inves- tigating its causes, etc) and its consequences, and sharing reliable and consistent information, to avoid creating confusion that could harm the company’s credibility or risk future liability. 5.4 Litigation Risk Assessment Legal Risks as Part of Proper Corporate Risk Management Legal risks are usually part of a companies’ risk management practices and should be mapped similarly as for any other risk associated with the company’s activities. Mitigating measures, action plans and severity analysis should also be considered within the expected management of these risks. 5.5 Involvement of Lawyers The Importance of Legal Advice During a Crisis The involvement of the legal team is paramount for successful crisis management, as legal impli- cations arise not only from the crisis (and its ori- gin) but also from the measures to be taken by the company once it occurs. A company facing a crisis should expect to receive close and com- plete oversight by the Brazilian justice institu- tions, and should therefore thrive to consider all legal implications of its actions. To be able to do that while still responding to the crisis in an effi- cient manner, the company should involve both its internal legal team – including a senior-level representative in the crisis committee – and an external legal firm with expertise in crisis man- agement.
31
CHAMBERS.COM
Powered by FlippingBook